Santander is poised to slash UK boss Nathan Bostock's £588,000 annual pension payments after rival Lloyds succumbed to pressure over perks for its own chief executive.
Mr Bostock's pension deal is under review following outrage over huge payments to chief executives which far outstrip the retirement perks given to ordinary staff.
At present, Mr Bostock gets a cash pension pay-out equal to 35pc of his £1.7m salary each year - far more than the 12.5pc maximum given to other Santander workers. The lender is expected to announce any changes in its full-year results in January.
Santander risks being the last major British bank with a huge pension disparity after it emerged that Lloyds is reducing payments to its boss Antonio Horta-Osorio.
Luke Hildyard, director of the High Pay Centre, said: "Major companies wanting to reward their staff fairly and proportionately and raise the public estimation of business should offer pension, share ownership and profit sharing schemes to all workers on the same terms.
There's no reason why chief executive pensions should be higher as a proportion of salary than their workers - there is no chance of hugely wealthy executives facing penury in old age, but that is a real risk for lower paid workers."
In a major climbdown, Lloyds sources told the Financial Times that it is cutting Mr Horta-Osorio's pension allowance by £220,000, from 33pc of his salary to 15pc. Meanwhile, workers' pension pots will increase from 13pc to up to 15pc of salary.
It is a marked U-turn for the bank, which earlier this year claimed Mr Horta-Osorio was a "winner" worth every penny of his £2.8m pay package.
Lloyds had said staff were not resentful of this bonanza because he returned the bank to full private ownership after its £20bn taxpayer bailout at the height of the financial crisis.
Mark Brown, the general secretary of Lloyds' staff union Affinity, welcomed the change of tack. But he added: "It is a pity that Mr Horta-Osorio had to be forced in to this position rather than doing it voluntarily."
The changes will make Santander the only big UK bank still awarding its boss a pension higher than 25pc of salary, the amount the Investment Association shareholder group has said should be a maximum.
HSBC, Royal Bank of Scotland and Standard Chartered have all taken action so far.
Earlier this month City investors with stakes in banks that still hadn't cut bosses' pension payouts urged them to follow suit after Standard Chartered said it would cut its chief executive's £474,000 annual contribution.
One major Barclays shareholder said the bank, which pays its chief Jes Staley a 17pc pension contribution compared to around 10pc for other staff, could come under pressure in coming months. His pension is also being reviewed, and could be cut next year.
The banking industry is not the worst offender, however. FTSE 100 building materials business CRH pays its chief executive Albert Manifold a pension contribution worth 46pc of his salary or €684,000 (£585,000) in 2018, causing triggering a rebellion by 15pc of investors at its annual meeting in April.
A Lloyds spokesman said: "In line with the regular three-year review of the group’s remuneration policy, we are consulting shareholders on all elements of the policy including pension allowances. As stated before, the group will continue to support the guidelines set out by the Investment Association."