Wanless could net pounds 1m in a NatWest takeover

The chief executive of National Westminster, Derek Wanless, would qualify for a pounds 1m payoff in the event of a takeover of the bank, it has emerged. He would benefit from a clause in his service agreement that replaces his one-year notice period with one of three years if there is a change in control of the bank.

The terms of Mr Wanless's service agreement, which appear to present the bank's head with a conflict of interest, are likely to face criticism from NatWest's institutional investors if they are viewed as being a reward for failure.

Internal controls at NatWest have come under scrutiny this year following a pounds 90m loss in the derivatives trading arm of the investment bank, NatWest Markets. The losses led to the resignation of NWM's chief executive, Martin Owen, but there have also been calls for more senior executives to take responsibility.

Some institutional investors say the problems within NatWest Markets are actually a distraction from the real problem, which is the dramatic underperformance of NatWest's core retail banking operation.

One senior investor pointed out yesterday that if the retail bank had performed in line with the banking sector then the market value of NatWest since the appointment of Lord Alexander as chairman in 1989 would be pounds 12bn higher than its current figure. The "lost value" is pounds 8bn taken from the time Derek Wanless was appointed chief executive in 1992.

On the issue of contracts, the investor said: "Clearly it would be obscene if [Derek Wanless] were to get three years' money. If the business had performed well it would be different but it would be quite ridiculous in the current circumstances."

Although NatWest denies it is in play, the bank is widely understood to have held preliminary merger discussions with both Abbey National and the Prudential. Analysts say any deal would need to clear large regulatory hurdles but rumours of a takeover have seen the previously underperforming shares rise sharply in the past three months.

According to NatWest's most recent report and accounts, Mr Wanless was paid pounds 369,000 in basic salary before a pounds 225,000 bonus and other benefits took his total remuneration for the year to pounds 639,000. Any takeover which resulted in him losing his job would put him in line for a compensation package worth pounds 1.1m.

Other directors in line to benefit from the generous service terms include chief financial officer Richard Delbridge, Martin Gray, chief executive of NatWest UK, and Bernard Horn, chief executive of group operations.

Not included are two of the bank's highest paid managers, chairman Lord Alexander and former Foreign Secretary Douglas Hurd, who is deputy chairman of NatWest Markets and earned pounds 250,000 last year. Neither are executive directors and are employed on one year contracts.

NatWest's senior executives also sit on valuable share options, which would be triggered by a takeover bid.

PROMOTED VIDEO
News
REX/Eye Candy
science
News
A photo of Charles Belk being detained by police on Friday 22 August
news
News
i100
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Google Doodle celebrates the 200th birthday of Irish writer Sheridan Le Fanu
tech
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
News
i100
News
In Eternal Sunshine of the Spotless Mind Jim Carrey and Kate Winslett medically erase each other from their memories
scienceTechnique successfully used to ‘reverse’ bad memories in rodents could be used on trauma victims
Arts and Entertainment
Singer Pixie Lott will take part in Strictly Come Dancing 2014, the BBC has confirmed
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Trade Desk FIX Analyst - (FIX, SQL, Equities, Support)

£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?