Metro Bank investors urged to reject executive pay report

Investors in Metro Bank are being urged to vote against the lender’s pay report next month, in protest of a complex bonus scheme that shareholder advisers say is “significantly out of line” with market standards.

Institutional Shareholder Services (ISS), which issues voting advice to some of the world’s biggest investors, made the recommendation weeks ahead of the bank’s annual meeting on 2 June.

The advice marks the second consecutive year that the proxy adviser has criticised the lender’s pay practices. Its concerns centre on the Metro board’s use of a complex bonus scheme known as a “shareholder value alignment plan”, or SVAP, which links executive payouts to the bank’s share price, regardless of how well bosses run the bank.

Metro Bank’s chief executive, Dan Frumkin, could end up with a £60m windfall by the end of the scheme.

“The plan remains significantly out of line with market standards,” ISS said. Its concerns about the share price-based bonus scheme were “further exacerbated” by salary rises for 2026, in which Frumkin’s fixed pay will rise 11.3% to £1.05m, from £943,500 last year, it said.

“The new salary level also appears relatively high for a company of this size in the FTSE 250,” the report added, saying “shareholders may also wish to note that the CEO received a c.20% salary increase in FY2024”.

Frumkin, who also benefited from the UK’s decision to ditch a cap on banker bonuses, saw his pay package more than double to £2.6m for 2025 – up from £1.2m a year earlier – marking the highest payout for a Metro Bank chief executive since its founding in 2010.

The report also raised concerns about “insufficient disclosure” of how Metro measured and doled out bonuses for non-financial targets, saying the lender provided only “vague descriptions” for the way it measured “people objectives” or “risk and regulatory objectives”.

ISS said, in regards to the pay report, which will be up for an advisory shareholder vote at the shareholder meeting next month: “A vote against this item is warranted.”

That was despite ISS acknowledging that the bank reported record revenues, and the highest underlying pre-tax profits, in its history last year. Metro’s share price also increased by more than a quarter in 2025, and has generally trended upwards since, the proxy adviser explained.