Belfast Telegraph

Barclays urges investors to reject Bramson board appointment

Through Sherborne, Edward Bramson holds a 5.5% stake in Barclays.

Barclays is battling an activist investor (PA)
Barclays is battling an activist investor (PA)

Barclays has told investors to block an attempt by activist investor Edward Bramson to gain a seat on the lender’s board, arguing his appointment would be “detrimental”.

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

The strongly worded circular added that Mr Bramson’s appointment would be “detrimental” and result in “significant disruption”.

As well as calling for board seat, Mr Bramson has called for Barclays to curtail its investment banking arm.

But Mr McFarlane said that doing so would be a massive distraction.

“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 his investment vehicle Sherborne, Mr Bramson holds a 5.5% stake in Barclays.

Last week he met face to face with Barclays chief executive Jes Staley in New York as part of an investor roadshow.

In the first update since the meeting, Mr McFarlane said the activist’s interests are “not aligned” with those of the bank or of long term shareholders, partly because of the structure of his holding.

“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 Sherborne’s track record at companies it has sought to shake up, arguing that Mr Bramson has overseen “executive management departures” and “large reductions in employees”.

“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.

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

The annual meeting will take place on May 2, when shareholders will vote on whether to appoint Mr Bramson to the board.