Nationwide draws up bonus plan that could give CEO £7m payday
Nationwide's chief executive, Debbie Crosbie, could land a maximum pay package of nearly £7m as part of a new bonus plan that has been criticised as 'borderline hypocritical' for a UK building society.
The pay policy, which will be put to its customers next month, would raise Crosbie's maximum payout by 43% to £6.9m.
She had previously been allowed to earn up to £4.8m under the building society's remuneration guidelines.
The plans were outlined in Nationwide's annual report, which argued that Crosbie's pay should reflect new demands following the £2.9bn takeover of Virgin Money, and should be offering payouts close to packages offered by rivals including Lloyds Banking Group and NatWest.
Those rivals, it said, had 'significantly increased' executive pay following the eradication of the UK banker bonus cap, which previously limited payouts to two times' salary. 'This has materially increased the gap between Nationwide and the firms with which we compete for senior talent,' its annual report said.
Nationwide now wants to offer Crosbie an annual bonus worth up to 150% of her £1.1m salary, up from 100%, and said it would consider hiking other elements – which could include long-term bonuses – in order to compete with other big high street lenders.
'While our proposed changes for 2025-26 will go some way to addressing the competitive gap, we remain materially behind some of our UK banking peers, and the committee recognises that future policy changes among other firms may further increase the existing gap,' the annual report said.
Nationwide is hoping that its customers back the new plan at its annual meeting, which is being held online on 25 July.
But the pay policy drew criticism from the High Pay Centre thinktank, which said a member-owned UK building society like Nationwide should not be trying to match UK banks on pay.
Luke Hildyard, the director of the High Pay Centre, said: 'It's borderline hypocritical for a building society that presents itself as an ethical alternative to the major banks to replicate their pay culture, the aspect of modern banking that people find most egregious.
'Nationwide is a longstanding institution with an established brand and business model. They really don't need to make such vast executive payouts and could better reflect the values they project in TV adverts by doing things differently.'
Nationwide had a TV advert banned last year that mocked its bank rivals. The original advert showed the actor Dominic West as a fictional, hard-nosed bank manager intent on closing branches. He mocked customers who have lost their life savings as a 'total yawn fest', clicks his fingers for a green smoothie and says: 'We're not Nationwide are we, we're nothing like them.'
Nationwide's annual report showed Crosbie was paid a total of £2.5m for the financial year to March, up 2.4% from a year earlier. The staff bonus pot – excluding new Virgin Money colleagues – rose 16.8% to £97m. Including the newly added Virgin Money workforce, the bonus pot totalled £132m.
A Nationwide spokesperson said: 'Nationwide has become the second largest provider of mortgages and retail deposits, and remains first for customer satisfaction, because it can attract, retain and motivate talented leaders to run a business of this scale and prioritise member value.'
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