A New Era of Banking Bonuses?
In a move that has sparked debate, Paul Thwaite, the CEO of NatWest, has secured the largest payout for a banking group executive since the infamous Fred Goodwin era. Thwaite's compensation package for 2025 exceeds £6.6 million, a significant increase from his predecessor's earnings. But here's where it gets controversial: Thwaite's pay is returning to pre-financial crisis levels, a time when excessive bonuses were blamed for contributing to the 2008 crisis.
Thwaite's achievement is twofold. Firstly, he guided NatWest, once a bailed-out entity, to full private ownership, a remarkable turnaround. Secondly, a decision to lift the banker bonus cap, which had previously limited bonuses to twice the salary, has significantly boosted his earnings. This decision, part of post-Brexit powers, was aimed at attracting high-earning bankers to the UK.
And this is the part most people miss: Thwaite's bonus includes an annual component of £1.5 million, a 68% increase from the previous year. The rest is tied to a long-term bonus scheme, with a £2.5 million payout for 2025. These bonuses are linked to NatWest's reported pre-tax profits of £7.7 billion for 2025, a substantial 24% rise.
NatWest isn't alone in this trend. Barclays, a rival bank, has also announced its largest bonus pool in 12 years, with bankers sharing £2.2 billion worth of bonuses for the 2025 financial year. This comes after Barclays reported a 13% rise in full-year profits to £9.1 billion.
So, is this a sign of a new era in banking, where bonuses are back with a bang? Or is it a step towards the excesses of the past? What are your thoughts on these developments? Feel free to share your opinions in the comments below!
