NatWest to hike chief’s pay as bank returns to full private ownership

Published

8 months ago

December 14, 2024

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NatWest Group is to hand its chief executive a potential multimillion pound pay boost as it returns to full private ownership after nearly 17 years in state hands.

Sky News has learnt that the chair of the bank’s remuneration committee, Lena Wilson, is consulting leading institutional shareholders about an overhaul of its boardroom pay policy.

The details will be put to a vote at NatWest’s annual meeting next spring, in accordance with rules requiring investors to vote on remuneration policies every three years.

Under the plans, Paul Thwaite, who took over as the bank’s interim chief executive in July 2023 before being handed the role on a permanent basis in February, would be in line for an increase in his maximum annual bonus from 100pc of his base salary to 150%.

NatWest also intends to replace its restricted share plan (RSP) for Mr Thwaite, which awarded him stock worth a maximum of 150% of his salary, with a performance share plan (PSP) which could pay him up to three times his basic pay each year.

Assuming his salary of just under £1.2m remains unchanged, that would mean him being in line for a maximum reward package – excluding pension contributions and other items – of about £6.6m, up from roughly £4.2m today.

Last year, he was awarded a total package of just over £2.4m.

The prospective increase would bring Mr Thwaite’s compensation more closely into line with peers including Charlie Nunn at Lloyds Banking Group and CS Venkatakrishnan at Barclays.

“CEO target pay will continue to remain lower than UK banking peers and is positioned around the FTSE-50 mid-market level,” Ms Wilson wrote in her letter to shareholders.

Mr Thwaite replaced Dame Alison Rose after she was forced to step down over the debanking row involving Nigel Farage, the Reform Party leader.

Leading City investors who have been part of the consultation process are said to be overwhelmingly supportive of the pay overhaul, particularly in the wake of NatWest’s performance this year, which has seen its shares surge by 90% during 2024.

Regulators have also begun to relax rules imposed on bankers’ pay imposed after the 2008 crisis, with the Bank of England recently signalling plans to reduce the period over which share awards vest and must be held.

A NatWest Group spokesperson said: “Our remuneration policy is subject to shareholder approval at our AGM and we would not comment on the detail of any proposed changes.

“Our objective with our remuneration policy is to ensure alignment between executive pay, performance and the long-term value created for our shareholders.”

Executive pay has been a sensitive subject for NatWest, which was previously called Royal Bank of Scotland Group, ever since it was rescued with £45.5bn of taxpayers’ money during the financial crisis of 2008.

The pension package of Fred Goodwin, RBS’s former chief, and bonuses awarded to Stephen Hester, who was parachuted in to replace him and stabilise the bank became huge political headaches for the governments of Gordon Brown and David Cameron.

Since the sale of the taxpayer’s majority stake in RBS kicked off in 2015, bonuses have become a less contentious issue for the bank.

On Friday, NatWest announced that the Treasury’s stake had fallen below 10% for the first time since the bailout.

“We are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group,” it said.

“Returning the bank to full private ownership is a shared ambition and one that is in the interest of all our stakeholders.”

Sky News revealed in October that the government was on track to fully exit its NatWest shareholding by the middle of 2025 – or sooner if it launches an institutional placing of part of its remaining stake.

Even after the partial recovery in its valuation, taxpayers will see a loss running to billions of pounds from the emergency bailout.

On Friday, shares in NatWest closed at 405.5p, giving it a market capitalisation of £32.6bn.

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Tesla approves $29bn share award to Elon Musk

Published

6 hours ago

August 4, 2025

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Tesla approves bn share award to Elon Musk

Tesla’s board has signed off a $29bn (£21.8bn) share award to Elon Musk after a court blocked an earlier package worth almost double that sum.

The new award, which amounts to 96 million new shares, is not just about keeping the electric vehicle (EV) firm’s founder in the driving seat as chief executive.

The new stock will also bolster his voting power from a current level of 13%.

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He and other shareholders have long argued that boosting his interest in the company is key to maintaining his focus after a foray into the trappings of political power at Donald Trump‘s side – a relationship that has now turned sour.

Musk is angry at the president’s tax cut and spending plans, known as the big beautiful bill. Tesla has also suffered a sales backlash as a result of Musk’s past association with Mr Trump and role in cutting federal government spending.

The company is currently focused on the roll out of a new cheaper model in a bid to boost flagging sales and challenge steep competition, particularly from China.

The headwinds have been made stronger as the Trump administration has cut support for EVs, with Musk admitting last month that it could lead to a “few rough quarters” for the company.

Tesla is currently running trials of its self-driving software and revenues are not set to reflect the anticipated rollout until late next year.

Musk had been in line for a share award worth over $50bn back in 2018 – the biggest compensation package ever seen globally.

But the board’s decision was voided by a judge in Delaware following a protracted legal fight. There is still a continuing appeal process.

Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details.

The special committee said in the filing on Monday: “While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivize Elon to remain at Tesla”.

It added that if the Delaware courts fully reinstate the 2018 “performance award”, the new interim grant would either be forfeited or offset to ensure no “double dip”.

The new compensation package is subject to shareholder approval.

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Motor finance operators can breathe big sigh of relief

Published

6 hours ago

August 4, 2025

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Motor finance operators can breathe big sigh of relief

Bank stocks have enjoyed a boost as traders digest the Supreme Court’s ruling on the car finance scandal.

Some of the country’s most exposed lenders, including Lloyds and Close Brothers, saw their share prices jump by 7.55% and 21.62% respectively.

It came after the court delivered a reprieve from a possible £44bn compensation bill.

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Banks will still most likely have to fork out over discretionary commissions – a type of commission for dealers that was linked to how high an interest rate they could get from customers.

The FCA, which banned the practice in 2021, is currently consulting on a redress scheme but the final bill is unlikely to exceed £18bn. Overall, the result has been better than expected for the banks.

Lloyds, which owns the country’s largest car finance provider Black Horse, had set aside £1.2bn to cover compensation payouts.

Following the judgment, the bank said it “currently believes that if there is any change to the provision, it is unlikely to be material in the context of the group”.

The judgment released some of the anxiety that has been weighing over the Bank’s share price.

Jonathan Pierce, banking analyst at Jefferies, said the FCA’s prediction was “consistent with our estimates, and most importantly, we think it largely de-risks Lloyds’ shares from the ‘motor issue'”.

Bank stocks have responded robustly to each twist and turn in this tale, sinking after the Court of Appeal turned against them and jumping (as much as 8% in the case of Close Brothers) when the Supreme Court allowed the appeal hearing.

Concerns about this volatility motivated the Supreme Court to deliver its judgment late in the afternoon so that traders would have time to absorb the news.

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FCA considering compensation scheme over car finance scandal – raising hopes of payouts for motorists

Published

1 day ago

August 3, 2025

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FCA considering compensation scheme over car finance scandal - raising hopes of payouts for motorists

Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.

In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.

“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.

The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.

It is unclear how many people could be eligible for a pay-out. The authority estimates most individuals will probably receive less than £950 in compensation.

The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.

What motorists should do next

The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.

Anyone who has already complained does not need to do anything.

The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”

Its website advises drivers to complain to their finance provider first.

If you’re unhappy with the response, you can then contact the Financial Ombudsman.

The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.

It has warned motorists that doing so could end up costing you 30% of any compensation in fees.

The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.

The court overturned a ruling that would have meant millions of motorists could have been due compensation over “secret” commission payments made to car dealers as part of finance arrangements.

The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.

Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.

In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.

This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.

It was previously estimated that about 40% of car finance deals included DCAs while 99% involved a commission payment to a broker.

Nikhil Rathi, chief executive of the FCA, said: “It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated.

“We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.”