An influential shareholder advisory group has sided with Barclays in its battle with an activist investor forward of a showdown on the financial institution’s annual assembly subsequent month.
Institutional Shareholder Companies, a proxy adviser, mentioned Edward Bramson, the activist investor, had “not introduced a sufficiently compelling case” in his marketing campaign to persuade different traders to vote him on to the Barclays board at its annual assembly on Could 2.
Mr Bramson has constructed up a 5.5 per stake in Barclays by way of his Sherborne Traders car and is pushing for the UK-based lender to reduce its underperforming funding financial institution in an try to spice up general returns.
These calls for have put him at odds with Jes Staley, Barclays’ chief government, who has pledged to guard Britain’s final remaining world funding financial institution from additional cuts.
ISS is without doubt one of the largest shareholder advisory teams and tends to carry sway over roughly 20 per cent of votes, which means its suggestions can usually show decisive in proxy battles.
The proxy adviser mentioned Mr Bramson had not supplied sufficient element on his various technique for the financial institution.
“The dissident marketing campaign — which is constructed on a quick investor letter disclosed a couple of weeks earlier than the annual assembly — falls in need of what can moderately be anticipated from a shareholder making an attempt to deal with points at a £28bn systemically vital financial institution,” ISS wrote in a notice despatched to its purchasers on Friday.
ISS mentioned Nigel Higgins, Barclays’ incoming chairman, “appears conscious about investor discomfort with previous efficiency” and counselled shareholders to present him extra time to deal with the financial institution’s points.
“In gentle of the board’s obvious cognisance of the problems outlined by [Mr Bramson] . . . the dissident has not introduced a sufficiently compelling instances that further change is warranted right now,” ISS added.
ISS is the second influential shareholder group to suggest that traders vote in opposition to Mr Bramson subsequent month.
Final week, Glass Lewis, one other proxy adviser, mentioned traders ought to vote in opposition to Mr Bramson on the annual assembly, citing the activist’s “questionable share possession framework” as one of many causes for its advice.
Because the Monetary Occasions revealed in February, Mr Bramson funded the vast majority of his stake in Barclays with a $1.4bn mortgage from Financial institution of America below a fancy association that had angered different massive shareholders.
“Whereas [Mr Bramson’s] present marketing campaign ought to function one thing of a clarion name for administration . . . we in the end imagine help for [his] proposal would entail significantly better danger and uncertainty,” Glass Lewis wrote to its purchasers.