"Pay has been kept low for the last three years because of poor profits caused by high bad-debt provisions. Now we have good profits and lower bad debts." said Alan Ainsworth, assistant secretary of the Banking Insurance and Finance Union.
"It's about time NatWest gave their staff a decent rise to reflect these huge profits." he added.
Earlier, NatWest announced pre-tax profits of £1.59bn for 1994, up from £989m.
Lord Alexander is to receive a bonus of around £100,000 as well as an above-inflation, 5 per cent pay rise that took his whole package to around £470,000.
NatWest branch staff, who have suffered 20,000 job cuts since 1990, have been offered below-inflation rises linked to performance before the 1 April review date.
Trade unions say that means a 1 to 2 per cent increase for most, with around 8 per cent of staff getting nothing at all.
Sir John Banham, himself a former director-general of the Confederation of British Industry, heads NatWest's remuneration committee, which sets Lord Alexander's pay.
Sir John vigorously rejected criticisms of Lord Alexander's bonus, saying the chairman had played a key role in leading the bank through the recession, and adding: "His pay is quite modest compared to chairmen of some other high street banks."
He said the results for 1994 represented the best return for shareholders in NatWest's history, and that only a third of the profits came from UK branch banking. The rest came from stockbroking and international banking.
The row about Lord Alexander's bonus comes as the business community awaits the CBI's own guidelines on top executive pay, expected in June. The CBI has set up its own committee on the subject under Sir Richard Greenbury, chairman of Marks & Spencer, but the committee was embarrassed yesterday by a disclosure from the Labour Research Department that seven of its 11 senior industrialists received £4m in total remuneration last year.
The business world is acutely aware that greed in the boardroom is under the spotlight as never before. In January, the Institute of Directors produced its own guidelines on top pay, while the National Association of Pension Funds produced its version last December.
The main thrust of the codes has been disclosure on pay, including pensions and perks, and NatWest was bending over backwards yesterday to insist that its annual report for 1994 will have greater transparency on executive pay than any other British bank previously.Reuse content