Paul Thwaite, the chief executive of NatWest Group, has secured the most substantial payout for a CEO at the banking group since the disgraced Fred Goodwin received £7.7m in 2006. Thwaite's £6.6m pay package for 2025 marks a significant milestone, coming after he guided the once-bailed-out lender to full private ownership last year.
Historic Pay Rise Amid Bank Privatisation
The boardroom at NatWest increased Thwaite's overall compensation by a third, surpassing the £5.2m awarded to his predecessor Alison Rose in 2022. Thwaite replaced Rose in 2023 following a controversy involving Nigel Farage, who alleged discriminatory account closures. This payout positions Thwaite as the highest-earning CEO of the group since 2006, when the bank, then known as Royal Bank of Scotland (RBS), was in its pre-financial crisis peak.
Fred Goodwin's excessive compensation was later criticised for contributing to the bank's near-collapse, necessitating a £45bn government bailout during the 2008 banking crisis. In contrast, Thwaite's earnings have been bolstered by NatWest's return to private ownership and the removal of the banker bonus cap.
Bonus Cap Removal and Financial Performance
Last year, the UK-wide reversal of the bonus cap, part of post-Brexit regulatory changes, allowed Thwaite's bonus to exceed previous limits. This move aimed to attract high-earning bankers to Britain. Thwaite's package includes a £1.1m salary, a £1.1m fixed share allowance, pension payments, and other benefits, topped with a £4m bonus.
The bonus comprises an annual component of £1.5m, a 68% increase from £890m the previous year, and £2.5m from a long-term incentive scheme. This jump aligns with NatWest reporting £7.7bn in pre-tax profits for 2025, a 24% rise from £6.2bn a year earlier.
Industry-Wide Bonus Trends
NatWest has also elevated payouts for its top bankers, increasing the group bonus pool by 10.8% to £495m, as per its annual report released on Friday. This is the highest level since 2013, when the bonus pool stood at approximately £576m post-financial crisis.
NatWest bankers are not alone in receiving enhanced rewards. Barclays announced a £2.2bn bonus pool for 2025, a 15% increase from £1.9bn last year, marking its largest in 12 years. This follows Barclays reporting a 13% rise in full-year profits to £9.1bn on Tuesday.
The trend reflects broader shifts in the banking sector, driven by regulatory changes and strong financial performances, raising questions about executive compensation and industry practices.
