Major UK banks are expected to win shareholder approval for substantial pay increases for their chief executives, following backing from influential proxy advisory firms ISS and Glass Lewis. The proposed hikes come 18 months after the removal of the UK banker bonus cap in late 2023.
NatWest is seeking a 43% increase in maximum pay for CEO Paul Thwaite, allowing him to earn up to £7.7 million annually. Barclays proposes a 45% rise for CS Venkatakrishnan, with a potential payout of £14.3 million, while HSBC aims for a 43% increase for Georges Elhedery, up to about £15 million. The banks argue that higher pay is necessary to compete with Wall Street rivals, such as JPMorgan, where CEO Jamie Dimon earned $39 million last year.
ISS and Glass Lewis acknowledged the significant increases but supported the banks' remuneration committees, citing the need to attract top talent in a global market. ISS noted that Barclays' proposals are “well below market” compared to US peers, while Glass Lewis highlighted that NatWest's current incentive opportunity is lower than other UK banks.
The backing marks a shift in shareholder sentiment, moving away from earlier ESG-driven rebellions over executive pay. Concerns about the UK's post-Brexit competitiveness and the Trump administration's crackdown on progressive policies have influenced this change. Both proxy firms have faced pressure from CEOs like Dimon, who criticized their influence on corporate governance.
NatWest's AGM is scheduled for 23 April, followed by HSBC on 2 May and Barclays on 7 May. The banks are expected to secure shareholder approval for the pay policies.
