Metro Bank’s chief executive has been handed a £2.6m pay packet – the largest in its history – a year after slashing 1,000 jobs in response to the lender’s near collapse.

The figure is more than double the £1.2m Dan Frumkin was paid in 2024. Metro pushed through the pay bump and complex bonus scheme for the former RBS and Northern Rock banker at a shareholder meeting last year.

It is the highest for a Metro chief executive since the lender was founded in 2010 as the first high street bank to open in the UK in more than a century.

Launched by the US billionaire Vernon Hill, Metro attracted a wave of customers with dog-friendly branches and seven-day opening hours.

However, a significant accounting error led to the resignation in 2019 of it top executives and founder and in 2023 the bank had to scramble for fresh investment after failing to convince regulators that it could be trusted to assess its own risks.

Metro fell into the hands of the Colombian billionaire Jaime Gilinski Bacal in a £925m rescue deal in 2023, resulting in a turnaround plan that led Frumkin to slash more than 1,000 jobs in spring 2024 and close branches on Sundays.

The bank, which is 53% owned by Bacal, has made a successful turn toward corporate lending, reporting a record pre-tax profit of £87m for 2025. That performance fed into the board’s decision to more than double Frumkin’s pay, including a £1.2m annual bonus on top of a £470,000 deferred bonus dating back to 2023. He was awarded a £938,875 salary on top of additional tax, life insurance and pension benefits.

Best known for helping restructure Northern Rock after the 2007-08 financial crisis, Frumkin is operating under a complex bonus scheme that could hand him up to a £60m windfall after five years, depending on Metro’s share price.

Its shares are worth about 141p and would have to be above 120p in 2028 for the bonus to kick in. A jump to 437p – which would be a stellar turnaround after a near wipeout in 2019 – could earn Frumkin a one-off payment of up to £60m.

The scheme was approved by shareholders, with 88.6% of votes cast in its favour despite warnings from the proxy advisory companies ISS and Glass Lewis. Metro was not immediately able to break down what proportion of votes in favour were cast by Bacal.

Commenting on Frumkin’s 2025 pay packet, a Metro Bank spokesperson said: “The remuneration committee’s approach is based on the delivery of long-term growth generation and the continued turnaround of the bank. The policy is fully aligned with shareholders’ interests and the creation of shareholder value over a sustained period.”

Frumkin became chief executive in 2020.