In a striking indication that the banking sector is recovering its pre-financial crisis pay structures, NatWest Group has announced a substantial £6.6 million remuneration package for its CEO, Paul Thwaite, for the year 2025. This marks the highest compensation for a chief executive at the bank since the controversial tenure of Fred Goodwin in 2006. The announcement has sparked discussions about the appropriateness of such elevated pay in light of the sector’s history and the recent economic landscape.
Record Pay Packages in the Banking Sector
The dramatic rise in executive salaries has not been limited to NatWest. Thwaite’s pay, which represents a 33% increase from his £4.9 million package in 2024, has set a precedent in the industry. This compensation surpasses the £5.2 million awarded to his predecessor, Alison Rose, in 2022. Thwaite succeeded Rose amid a significant public controversy involving the closure of accounts linked to prominent political figure Nigel Farage, which raised questions about the bank’s operational integrity.
Thwaite’s package stands out as a notable recovery for the banking sector, which suffered reputational damage in the wake of the 2008 financial crisis that necessitated a £45 billion government bailout for the Royal Bank of Scotland (RBS), of which NatWest is a part. The government divested its remaining shares in NatWest in May last year, marking the end of state ownership.
Comparisons with Global Peers
Thwaite’s remuneration announcement coincided with Citigroup’s disclosure that CEO Jane Fraser received a record $42 million (£31 million) for 2025, which includes a substantial bonus that has increased her overall pay by nearly 25%. Additionally, Lloyds Banking Group has revealed a 20% pay rise for its CEO, Charlie Nunn, bringing his total compensation to £7.4 million, the highest in a decade.
This trend reflects a broader resurgence in executive pay across major banking institutions, signalling a potential shift back to the lavish compensation packages seen prior to the financial crisis. The bank sector appears to be embracing a more aggressive approach to attracting and retaining top talent, a strategy underscored by the removal of restrictions on bonus caps, which previously limited compensation opportunities for executives.
Increased Profits Drive Pay Growth
The rationale behind these burgeoning pay packages is largely attributed to significant profit growth within these banks. NatWest reported a remarkable £7.7 billion in pre-tax profits for 2025, a 24% increase from the previous year’s £6.2 billion. This robust financial performance has undoubtedly contributed to the bank’s decision to enhance its compensation structures, including an increase in the group bonus pool by 10.8% to £495 million, the highest level since 2013.
Moreover, NatWest’s annual report revealed that 89 individuals classified as “material risk takers” earned over €1 million (£870,000) in 2025, with a select few receiving even larger sums. This distribution of wealth within the organisation reflects a growing trend of rewarding high performers, which is becoming increasingly common in the competitive landscape of financial services.
Executive Perspectives on Pay
When questioned about the appropriateness of his pay returning to pre-crisis levels, Thwaite expressed pride in NatWest’s recent achievements. He acknowledged the high compensation typical in senior roles within financial services, stating, “I believe I’m very fortunate… there’s obviously a very close link between reward and performance.” His comments underscore the sentiment that executive remuneration is often tied to individual and organisational success, though it does raise ethical considerations given the historical context of banking compensation.
Why it Matters
The surge in executive pay within NatWest and other major banks signals a pivotal moment in the financial sector’s recovery from the scars of the 2008 crisis. As banks return to pre-crisis compensation norms, stakeholders must grapple with the implications of such trends on public trust and corporate responsibility. This evolution in pay structures not only reflects a revitalisation of profit margins but also ignites a discourse on the sustainability and ethics of high executive remuneration in an era still healing from the repercussions of financial mismanagement. As the banking landscape shifts, it is crucial to monitor how these developments influence both employee morale and customer perceptions in an industry striving to rebuild its reputation.
