Metro Bank investors urged to reject CEO pay package over ₹650 crore bonus plan

Investors in Metro Bank are being urged to vote against the lender’s executive pay report next month after a leading shareholder advisory firm criticised the bank’s bonus structure and rising executive compensation.

According to reporting by The Guardian, proxy advisory firm Institutional Shareholder Services (ISS) has recommended that shareholders oppose the pay report at Metro Bank’s annual general meeting scheduled for June 2, 2026.

ISS said the bank’s executive reward structure remained “significantly out of line” with broader market standards.

The criticism centres on Metro Bank’s use of a bonus structure called the Shareholder Value Alignment Plan (SVAP), which links executive rewards largely to the bank’s share price performance.

CEO could receive payout worth £60 million

Under the existing structure, Metro Bank chief executive Dan Frumkin could reportedly receive a payout worth up to £60 million by the end of the scheme.

ISS raised concerns that the bonus plan places too much emphasis on share price growth rather than broader measures linked to executive performance and operational delivery.

The shareholder adviser also criticised salary increases approved for senior executives.

According to the report:

• Dan Frumkin’s fixed salary will rise 11.3 per cent to £1.05 million in 2026
• His previous salary stood at £943,500
• Frumkin had already received an estimated 20 per cent salary increase in FY2024
• His total pay package for 2025 more than doubled to £2.6 million, compared with £1.2 million a year earlier

The publication noted that the latest compensation package marks the highest payout for a Metro Bank chief executive since the bank was founded in 2010.

ISS questions transparency around bonuses

ISS also raised concerns about what it described as insufficient disclosure around non-financial performance targets tied to executive rewards.

According to the report, Metro Bank provided only vague explanations regarding how it assessed:

• “People objectives”
• “Risk and regulatory objectives”
• Other non-financial bonus metrics

ISS said shareholders should oppose the remuneration report despite acknowledging that Metro Bank had delivered strong financial performance over the past year.

The bank reportedly recorded:

• Record revenues
• Its highest underlying pre-tax profit to date
• A share price increase of more than 25 per cent during 2025

Even so, ISS maintained that the structure of the bonus plan itself remained problematic.

Metro Bank continues turnaround efforts

Metro Bank has spent the past two years attempting to stabilise and rebuild operations after facing severe financial pressure in 2023.

The lender narrowly avoided collapse after securing a £925 million rescue deal led by Colombian billionaire Jaime Gilinski Bacal, who now owns around 53 per cent of the bank’s shares.

Since then, the bank has focused heavily on restructuring operations and expanding corporate lending activity as part of its turnaround strategy.

The latest investor scrutiny arrives at a sensitive stage in that recovery process.

Bank defends executive compensation structure

Responding to the criticism, a Metro Bank spokesperson defended the remuneration framework.

According to comments cited in the report, the bank said its remuneration committee designed the compensation policy around long-term growth generation and the continued turnaround of the business.

The spokesperson added that the structure remained aligned with shareholder interests and focused on creating sustainable long-term value.

The shareholder vote on the pay report will be advisory rather than binding. However, opposition from ISS is significant because the advisory firm influences voting decisions for many large institutional investors globally.

The outcome of the upcoming vote is likely to be closely watched as scrutiny over executive compensation continues to intensify across the banking sector, particularly at companies undergoing restructuring or cost-cutting programmes.