NatWest Group, with nearly 40% ownership by British taxpayers, has made the decision to cancel a significant portion of the potential payout to Dame Alison Rose, its former chief executive. The move comes as the bank attempts to put an end to the ongoing controversy surrounding the closure of Nigel Farage’s accounts at Coutts. While exact figures remain unclear, it is expected that NatWest will take a firm stance against Dame Alison, who resigned in July after admitting to discussing Farage’s banking arrangements with a BBC journalist. This decision will result in the forfeiture of millions of pounds in unvested share awards for Dame Alison, although she is still anticipated to receive a substantial sum in the form of her basic salary and fixed share allowance.
The board’s decision not to pay the discretionary elements of Dame Alison’s pay package marks a significant shift in NatWest’s approach. Previously, she had been entitled to a yearly salary of £1.16 million, as well as an additional sum of the same amount in deferred share awards. Furthermore, as part of her contract, Dame Alison was expected to receive a 12-month notice period. However, the decision means that she will now lose out on approximately £5 million in unvested share awards. Despite this, the bank will still cover her legal fees, further adding to the controversy surrounding the situation.
Although Dame Alison faced criticism and accusations of breaking privacy laws from the Information Commissioner’s Office, she received an apology from the organization after it admitted to making incorrect claims. The apology followed a subject access request made by Mr Farage, in which it was revealed that NatWest employees had made derogatory comments about him. This revelation prompted the bank to issue its own apology to Mr Farage and acknowledge the “serious failings” in its treatment of him. The incident sparked widespread outrage and led to an urgent review of “debanking” practices within the banking sector.
In August, a public filing by NatWest confirmed that Dame Alison had been receiving an annual package of £2.4 million, which included her base salary, pension contribution, and a share-based fixed-pay allowance. Additionally, she was eligible for a pro-rata portion of the £2.9 million annual bonus and long-term share awards, making up the remainder of her total maximum pay package of £5.3 million. Furthermore, she held approximately 2.5 million unvested shares in the bank, which were valued at around £5 million. However, given her departure midway through 2023, she would have only been eligible for just over half of the £2.9 million in annual variable pay.
Following her resignation, Dame Alison was replaced on an interim basis by Paul Thwaite, previously the head of NatWest’s commercial business. Her departure came after she acknowledged supplying inaccurate information to a BBC journalist regarding the reasons for closing Mr Farage’s accounts. Initially, Dame Alison attempted to quell the controversy by apologizing to Farage and foregoing her bonus for the year. However, this was not enough to salvage the situation, and following a loss of confidence in her leadership from Downing Street, an emergency board meeting was called, resulting in her departure.
NatWest’s decision to reduce Dame Alison Rose’s payout signifies a significant turning point in the aftermath of the debanking row. By refusing to pay most of the discretionary elements of her pay package, the bank aims to distance itself from the controversy surrounding Farage’s account closure. While Dame Alison will lose out on millions of pounds in unvested share awards, this move may help restore public confidence in the bank and its actions. The fallout from this situation underscores the need for banks to carefully consider their treatment of customers and exercise transparency in their decision-making processes.