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.
More from Money
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.
Inflation fell more than expected and for the second month in a row, official figures show.
The consumer price index (CPI) measure of inflation fell to 2.6% in March, down from 2.8% in February and 3% in January, according to Office for National Statistics (ONS) data.
It means prices are rising at the slowest pace since December and closest to the Bank of England’s 2% target.
The rate is also lower than expected by economists polled by Reuters, who anticipated inflation of 2.7%.
But the drop is likely to be short-lived as a raft of bill rises kicked in at the start of April.
Energy, water, and council tax bills rose throughout the UK at the start of this month.
Why did inflation fall?
More on Inflation
Related Topics:
It was a fall in fuel costs, thanks to lower oil prices that led to the surprise drop, combined with the unchanged food price rise.
The price of games, toys and hobbies, as well as data processing equipment, all fell.
These drops counteracted a “strong” rise in the price of clothes, the ONS said.
The late timing of Easter also meant comparing March 2024 – as the ONS does with its annual inflation rise figure – with March 2025 isn’t comparing like with like.
Easter and the associated school break bring things like higher airfares and hotel costs, something that was not seen last month as the feast takes place in April this year.
What does this mean for interest rates?
All measures of inflation fell, in a boost to the Bank of England as they mull interest rate cuts.
A key way of assessing price rises, core inflation, which excludes volatile price items like fuel and food, dropped to 3.4%.
It’s closely watched by the rate setters at the Bank of England, who meet next month and are widely expected to make borrowing less expensive by bringing interest rates down to 4.25%.
Another important measure – services inflation – dropped to 4.7% from 5% in February. As a predominantly services-based economy, a drop in that rate is good news for central bankers and households.
Please use Chrome browser for a more accessible video player
1:42
Could Trump’s tariff be positive?
Inflation data, combined with the fact job vacancies are at pre-pandemic levels for the first time since 2021, has meant traders are now expecting four interest rate cuts this year, which would bring the base interest rate to 3.5% by December.
Business Secretary Jonathan Reynolds has said it is “likely” that British Steel will be nationalised.
However he also stressed the importance of finding a private sector partner for the business because the scale of capital required for steel transformation was “very significant, even with government support”.
Mr Reynolds, speaking to reporters in the Lincolnshire town after raw materials arrived to keep the site running, said that nationalisation was the “likely option at this stage”.
He added: “What we are now going to do, having secured both control of the site and the supply of raw materials, so the blast furnaces won’t close in a matter of days, is work on the future.
“We’ve got the ownership question, which is pressing.
“I was clear when I gave the speech in parliament – we know there is a limited lifespan of the blast furnaces, and we know that what we need for the future is a private sector partner to come in and work with us on that transformation and co-fund that transformation.”
The government passed emergency legislation on Saturday to take over British Steel’s Scunthorpe plant, the last in the UK capable of producing virgin steel, after talks with its Chinese owners, Jingye, broke down.
The company recently cancelled orders for supplies of the raw materials needed to keep the blast furnaces running, sparking a race against time to keep it operational.
While those materials have been secured, questions remain about the long-term future of British Steel and whether it will be fully nationalised or the private sector will get involved.
Reynolds rows back
Mr Reynolds earlier said he would look at Chinese firms “in a different way” following the rowbut did not rule out their involvement completely.
He previously told Sky News’ Sunday Morning With Trevor Phillips,that he would not “personally bring a Chinese company into our steel sector” again, describing steel as a “sensitive area” in the UK.
However, industry minister Sarah Jones took a different position on Tuesday morning, telling Sky News she is “not ruling out” the possibility of another Chinese partner.
She said having a pragmatic relationship with Beijing, the world’s second-biggest economy, is still important and stringent tests would apply “to a Chinese company as they would to any other company”.
Asked for clarity on his position during a visit to the port of Immingham, where materials from two ships were being unloaded and transported to the plant, Mr Reynolds said: “I think we’ve got to recognise that steel is a sensitive sector.
“A lot of the issues in the global economy with steel come from production and dumping of steel products… so I think you would look at a Chinese firm in a different way.
“But I’m really keen to stress the action we’ve taken here was to step in because it was one specific company that I thought wasn’t acting in the UK’s national interest, and we had to take the action we did.”
Please use Chrome browser for a more accessible video player
9:35
China relationship ‘really important’
The materials that arrived on Tuesday, including coking coal and iron, are enough to keep the furnaces running for weeks, the Department for Business and Trade said.
They are needed because if the furnaces cool down too much, the molten iron solidifies and blocks the furnaces, making it extremely difficult and expensive to restart them.
Switching off furnaces is a costly nightmare the govt wants to avoid
There’s no switch that easily turns a blast furnace on and off.
Temperatures inside can approach 2,000C and to protect the structure the interior is lined with ceramic insulation.
But the ceramic bricks expand and contract depending on the temperature, and any change needs to be done carefully over several weeks to stop them cracking.
Molten material inside the furnace also needs to be drained by drilling a hole through the wall of the furnace.
It’s a dangerous and expensive process, normally only ever done when there’s a major planned refurbishment.
That’s why the government wants to keep the furnaces at Scunthorpe burning.
The problem is, supplies for the furnaces are running low.
They need pellets of iron ore – the main raw material for making steel.
And they also need a processed form of coal called coke – the fuel that provides both the heat and the chemical reaction to purify the iron so it’s ready to make strong steel alloy.
Without a fresh supply of both the furnaces may have to be turned off in just a fortnight. And that would be a complex, costly nightmare the government wants to avoid.
‘Chinese ownership truly dreadful’
Opposition politicians have accused China of sabotage to increase reliance on its steel products, and want the country to be prevented from future dealings not only with steel but any UK national infrastructure.
Veteran Tory MP Sir Iain Duncan Smith said the government needs to define which industries are “strategic” – and prevent China from being allowed to invest in such sectors.
Liberal Democrats foreign affairs spokesperson Calum Miller said reverting to Chinese ownership would be like finding “your house ransacked and then leaving your doors unlocked”.
Image: Raw materials for the Scunthorpe steel plant
Image: Coking coal is unloaded at Immingham Port. Pic: Reuters
Reform UK leader Nigel Farage took the same position, saying the thought the government “could even contemplate another Chinese owner of British steel is truly dreadful”, and that he would not have China “in our nuclear program, anywhere near our telecoms or anything else”.
“They are not our friends,” he added.
Number 10 said on Monday that it was not aware of any “sabotage” at the plant and there is no block on Chinese companies.
The Chinese embassy has urged the British government not to “politicise” the situation by “linking it to security issues”, saying it is “an objective fact that British steel companies have generally encountered difficulties in recent years”.
Spreaker
This content is provided by Spreaker, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable Spreaker cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.
Unfortunately we have been unable to verify if you have consented to Spreaker cookies.
To view this content you can use the button below to allow Spreaker cookies for this session only.
Jingye reported losses of around £700k a day at Scunthorpe, which will now come at a cost to the taxpayer.
During Tuesday morning’s interview round, Ms Jones said the government had offered Jingye money in return for investment and “we think that there is a model there that we could replicate with another private sector company”.
But she said there “isn’t another private sector company there waiting in the wings” currently, and that it may be a “national solution” that is needed.
She said “all of the options” were expensive but that it would have cost more to the taxpayer to allow the site to shut.
A YouGov poll shows the majority of the public (61%) support the government’s decision to nationalise British Steel.
A former executive at DAZN, the sports streaming platform, is to be appointed this week as the next chairman of Playtech, the London-listed gambling technology group.
Sky News has learnt that Playtech will announce on Wednesday that John Gleasure, who was also a co-founder of the digital sports media group Perform, is to succeed Brian Mattingley in the role.
In accepting the Playtech chairmanship, Mr Gleasure will inherit a position which has repeatedly been at the centre of fractious corporate governance challenges.
Mr Mattingley, who has held the role since 2021, has overseen a frenetic period of corporate activity while also finding himself in the eye of a series of storms with shareholders over boardroom pay.
The most recent of those came in December when close to a third of investors rebelled over a €100m bonus plan for Mor Weizer, the company’s chief executive, along with other senior executives.
Shareholders give Mr Mattingley credit, however, for helping to navigate the company through a challenging period in the gambling industry, in particular his role last year in securing the sale of Snaitech, its Italian consumer gambling arm, for €2.3bn.
That deal, which received regulatory approval last week, represented a near-threefold return on Playtech’s initial investment and will trigger a special dividend worth up to €1.8bn (£1.5bn), to be paid in June.
More from Money
The sale of Snaitech will transform Playtech into a pure-play business-to-business operation.
Many analysts believe the remaining company will rapidly become a takeover target.
A source close to Playtech pointed out that shares in the company had risen nearly 60% during Mr Mattingley’s tenure.
Mr Gleasure, who will succeed Mr Mattingley as chairman after Playtech’s annual meeting next month, has also held roles at Sky Sports, which shares a parent company with Sky News, Hutchison 3G and Sony Pictures.
He continues to sit on the board of DAZN Group and is executive chairman of The Sporting News, a digital publisher in which Playtech acquired a minority interest in 2023.
Egon Zehnder International, the boardroom headhunter, has been overseeing the search for Mr Mattingley’s successor.
A Playtech spokesperson declined to comment on Tuesday.