Barclays and NatWest are among the latest businesses to drop climate goals from their bonus schemes for senior executives.
The two banking giants plan to remove sustainability measures from their annual award assessments as businesses globally shun diversity and environment targets related to pay.
NatWest’s overhaul of its remuneration policy could mean its chief executive Paul Thwaite is in line for a £3.5 million payout under a “performance share plan” (PSP).
The bank introduced a PSP as part of its executive remuneration policy review this year, which it says is more of the norm across the sector than a restricted share plan (RSP). While a PSP is aligned to specific performance targets, an RSP is not.
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A NatWest Group spokesperson explained that sustainability measures will continue to be included as part of the company’s executive remuneration as a metric within the new performance share plan scorecard. Sustainability, including climate targets, will have a weighting of 15% of the PSP scorecard.
The spokesperson said: “As part of our executive remuneration policy review, we’ve introduced a performance share plan to strengthen the link between reward and performance over the longer term. Sustainability measures continue to form part of our executive remuneration as a metric within the new performance share plan, an approach that is aligned to many peers across the sector.”
The move was revealed as six of the largest US lenders – including Goldman Sachs, JPMorgan Chase and Morgan Stanley – withdrew from the global banking industry’s biggest net-zero alliance in response to climate quotas.
Last week, Barclays revealed a rise in pre-tax profits in 2024 and announced it would be doubling its CEO’s pay to £10.5m.
Climate metrics previously formed part of the company’s annual bonus scheme for CS Venkatakrishnan, and its long-term incentive plan (LTIP) for top performers.
In its annual report, however, the bank stated that “sustainability measures have been removed from the annual bonus” and will instead be included in its LTIP scheme, where it will be combined with client and customer measures and account for 25% of the payout.
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