Bank bonuses provoke row

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The Independent Online
Bank bonuses provoke row


A fresh storm blew up yesterday over executive pay as NatWest, the high street bank, revealed that 11 directors shared bonuses of £1.6m last year. Kleinwort Benson, the merchant bank, also disclosed that eight directors booked £1.2m of paper profits from exercising share options as the company's 10-year-old scheme expired.

Eddy Weatherill, chief executive of the Independent Banking Advisory Service watchdog group, said: "These payments are a disgrace. A lot of small business customers will gawp at these massive payments.''

NatWest's annual report includes, for the first time, full disclosure of all executive and non-executive directors. The biggest bonus was £914,000 for John Tugwell, chairman and chief executive of Bancorp, the US arm. He also earned a salary of £532,000 and benefits of £16,000, making a total of £1.46m. The total, however, was £350,000 less than the £1.81m he received in 1993. Derek Wanless, group chief executive, received the biggest bonus paid to British directors. His remuneration rose from £432,000 to £499,000, including a £115,000 bonus, £24,000 from profit-sharing and £23,000 of benefits. Lord Alexander also banked a big rise. His remuneration comprised his first bonus of £100,000 and totalled £417,000, up from £305,000.

NatWest's current pay offer to staff will result in some staff receiving no increase in basic salary. Full-time staff numbers were cut by 4,000 to 87,400 in 1994, a year in which NatWest boosted pre-tax profits from £989m to £1.592bn. The increases were defended by Sir John Banham, non- executive chairman of the remuneration committee, who himself banked £45,000 for his services. "We are committed to introducing a performance culture while ensuring all those with a stake in NatWest Group understand how we reward top management."

At Kleinwort Benson, eight directors, including Lord Rockley, the chairman, exercised rights to options on 375,490 shares. The lowest exercise price was 236.56p for Lord Rockley, who activated 27,199 options, and the highest was 370p for two other directors. Lowest market price at time of any exercise was 523.5p, the highest 585.5p. The total wage bill for the 24-strong board, however, fell from £6.78m to £5.86m due, in part, to a drop in pension costs from £981,000 to £377,000.

Also yesterday, it was disclosed that John Carter, the chief executive of Commercial Union, saw his total salary last year rise to £ 398,315 from £295,370, including performance-related and pension payments totalling £111,301. Nicholas Baring, former deputy chairman and director of Barings merchant bank, got a 32 per cent pay rise to £84,552 as chairman of CU, according to the annual report.