Barclays and NatWest have removed climate targets from their bonus schemes

Barclays, NatWest and other businesses have recently dropped climate goals from their incentive schemes for senior executives.

Both banking giants are planning to remove sustainability metrics from their annual awards assessments, as businesses around the world shun diversity and environmental targets that relate to pay.

The overhaul of NatWest’s remuneration plan could result in its chief executive Paul Thwaite receiving a payout of PS3.5 million under a “performance-share plan” (PSP).

This year, the bank implemented a PSP in its review of executive remuneration policies. It says that this is more common than a restricted stock plan (RSP) across the industry. A PSP is linked to specific performance goals, but an RSP does not.

NatWest Group’s spokesperson confirmed that sustainability will be included in the executive compensation of the company as a measure within the new Performance Share Plan scorecard. The PSP scorecard will include 15% for sustainability, which includes climate targets.

A spokesperson stated: “As part our executive remuneration review, we have introduced a performance-share plan to strengthen the relationship between reward and long-term performance.” As part of the new performance-based plan, sustainability measures are still a key component in our executive compensation. This is a similar approach to that adopted by many other companies across the industry.

Six of the biggest US banks, including Goldman Sachs and JPMorgan Chase, withdrew their support from the world’s largest net-zero banking alliance due to climate quotas.

Last week Barclays announced a rise of pre-tax profit in 2024, and that it would double its CEO’s salary to PS10.5m.

Climate metrics were previously part of the company’s annual bonus scheme (annual bonus scheme) for CS Venkatakrishnan and its long-term incentives plan (LTIP), for top performers.

The bank’s annual report stated, however, that “sustainability has been removed from the bonus scheme” and it will now be included in the LTIP scheme where it will be combined along with customer and client measures and account 25% of the payout.

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