Metro Bank CEO Awarded Record £2.6m Pay Package After Major Restructuring
Metro Bank's chief executive, Dan Frumkin, has been granted a £2.6m annual pay packet, marking the highest compensation in the bank's history since its founding in 2010. This substantial increase comes just one year after Frumkin oversaw the elimination of over 1,000 positions as part of a drastic turnaround strategy aimed at stabilizing the lender following its near collapse.
Pay Surge and Bonus Scheme Details
The £2.6m figure represents more than double the £1.2m Frumkin earned in 2024. This pay bump was approved by shareholders at a meeting last year, alongside a complex bonus structure that could potentially yield Frumkin up to £60m over five years, contingent on Metro Bank's share price performance. Specifically, the shares must exceed 120p by 2028 to activate the bonus, with a rise to 437p triggering the maximum £60m payout.
Currently, Metro Bank shares are valued at approximately 141p. The bank reported a record pre-tax profit of £87m for 2025, largely driven by a successful shift toward corporate lending. This financial recovery influenced the board's decision to enhance Frumkin's compensation, which includes a £1.2m annual bonus and a £470,000 deferred bonus from 2023, on top of a £938,875 salary and additional benefits.
Historical Context and Recent Challenges
Metro Bank, launched by US billionaire Vernon Hill, initially gained popularity with innovative features like dog-friendly branches and seven-day opening hours. However, the bank faced significant turmoil due to a major accounting error in 2019, leading to the resignation of top executives and founder Hill. In 2023, Metro Bank required a £925m rescue deal orchestrated by Colombian billionaire Jaime Gilinski Bacal, who now owns 53% of the bank.
As part of the turnaround plan, Frumkin implemented cost-cutting measures, including job reductions and the closure of Sunday branches. Despite these challenges, the bank has shown signs of recovery, with the recent profit surge underscoring its renewed focus on corporate lending.
Shareholder Approval and External Concerns
The bonus scheme received strong shareholder support, with 88.6% of votes in favor, although proxy advisory firms ISS and Glass Lewis had issued warnings against it. Metro Bank has not disclosed the specific proportion of votes cast by Bacal in support of the plan. A bank spokesperson emphasized that the remuneration committee's approach is designed to foster long-term growth and align with shareholder interests, aiming to create sustained value over time.
Frumkin, who became chief executive in 2020, is known for his role in restructuring Northern Rock after the 2007-08 financial crisis. His leadership at Metro Bank continues to navigate the lender through a period of transformation, with his compensation now reflecting the bank's precarious yet improving financial trajectory.
