Excello Law employment Partner David Greenhalgh has written an article for the Solicitors Journal discussing the controversy surrounding NatWest and severance pay for its CEO, Dame Alison Rose, following the closure of Nigel Farage’s Coutts bank accounts. The bank’s Wealth Reputational Risk Committee decided to “exit” Farage’s accounts in July 2023, sparking questions about the reasons behind this decision.
Dame Alison Rose publicly apologised for inappropriate comments made by Coutts staff justifying the closure and clarified that these comments did not represent the bank’s views. However, she did not disclose the specific reasons for de-banking Farage, although a dossier revealed that it was partly due to his views being deemed incompatible with the bank’s values.
Rose later admitted to discussing details of Farage’s accounts with the media, leading to her resignation as CEO of NatWest. The fact that the UK government owns a significant stake in NatWest and the criticism from Conservative MPs played a role in her resignation.
Greenhalgh highlights the controversy surrounding Rose’s potential compensatory package after her resignation, given her significant remuneration as CEO. NatWest announced that she would receive a salary/notice, shares, and pension payments totaling around £2.4 million as part of her exit package.
Greenhalgh notes that it’s uncommon for bank CEOs to leave their positions under such circumstances, citing examples like Bob Diamond and Jes Staley. In many cases, senior executives negotiate exit terms to avoid litigation and negative publicity. NatWest is currently reviewing Rose’s severance pay package pending an investigation into her actions during the Farage account closure.
The final decision on Rose’s exit pay will depend on the findings of the investigation and any settlement agreement reached between Rose and the bank, with potential reputational consequences for NatWest.