Barclays Asks Investors To Turn Down Appointment Of Bramson To Company Board

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Barclays has urged its investors to prevent an attempt by Edward Bramson, an activist investor, to obtain a seat on the board of the company. It argued that his appointment would be “detrimental.”

In a notice that was published ahead of the annual meeting of the bank that is scheduled in May, John McFarlane, the outgoing chairman of the firm, wrote that the board is unanimous in its view that the presence of Mr Bramson at the top table would “not be in the best interests of shareholders as a whole.”

The strongly worded circular said that the appointment of Mr Bramson would be “detrimental” and end up in “significant disruption.”

As well as requesting for a seat in the board, Mr Bramson has urged Barclays to curtail its investment banking arm.

However, Mr McFarlane said that doing so would be considered as a massive distraction.

He stated: “If implemented, it would disrupt the group’s strategy and divert the board into a new, prolonged round of review and/or restructuring at a time when focus should remain on the successful execution of the group’s strategy and improving returns to shareholders.”

Through Sherborne, his investment vehicle, Mr Bramson holds a 5.5 percent stake in Barclays.

Last week he met with Jes Staley, the Chief Executive Officer of Barclays,  face to face in New York as part of an investor roadshow.

In the first update released since the meeting, Mr McFarlane said that the interests of the activist are “not aligned” with those of the bank or of its long term shareholders, partly due to the structure of his holding.

Mr McFarlane stated: “The board believes that this structure results in a shorter term focus for Sherborne and, as a result, Mr Bramson is incentivised to try and create near-term share price improvement at the potential expense of long-term sustainable shareholder value.”

The chairman also took aim at the track record of Sherborne at the firms it has sought to shake up. He argued that Mr Bramson has overseen “executive management departures” and “large reductions in employees.”

He added: “Such initiatives would be counterproductive, creating uncertainty, risking the destabilisation of management and employees, and jeopardising our performance and the ability to deliver sustainable returns to shareholders.”

He said that none of the previous investments of Sherborne involved a bank, “let alone an organisation of the scale and complexity of Barclays.”

The annual meeting is scheduled to take place on the 2nd of May. The shareholders are set to vote on whether to appoint Mr Bramson to the board of the company.