Thursday 2 May 2019 3:29 pm

Activist investor Ed Bramson suffers heavy defeat in battle for seat on Barclays board

Activist investor Ed Bramson has suffered a heavy defeat in his battle to win a seat on the Barclays board.

Shareholders votes came in at 87.2 per cent against his election, as the US-based investor was only able to amass 12.8 per cent of the vote.

Aside from his own 5.5 per cent stake, and factoring in turnout Bramson could only persuade less than four per cent of the bank’s other shareholders to support his case.

The elusive Bramson, who predicted a heavy defeat, did attend the AGM this morning but left within minutes of the meeting starting.

Bramson, whose investment vehicle Sherborne Investors holds a 5.5 per cent stake, has repeatedly called for Barclays’ investment banking division to be scaled back.

Frustrated that his concerns were being ignored, the US-based investor called a vote to elect him to the board.

Barclays has accepted its investment bank is not performing “at the level which it should” but has robustly attempted to fend off Bramson’s efforts to muscle his way onto the board.

Despite Bramson’s loss disgruntled shareholders vented their frustration at the board over the bank’s share price, which has fallen 20 per cent in the past year.

Regular attendee and Barclays critic Michael Mason-Mahon said: “I have to say it, and I don’t want to – but I support Mr Bramson coming onto this board, it might wake this board of directors up.”

Another shareholder urged investors to vote against Branson’s election but give the board a “kick up the backside.”

Another said that despite the underperformance of the bank, Bramson was “not the answer.”

The bank’s first quarter results failed to give either side the edge last week ahead of today’s meeting.

Barclays’ investment bank saw pre-tax profits fall 29 per cent and returns, which Bramson has taken particular issue with, drop to 9.5 per cent from 13.2 per cent the previous year.

But the division outperformed all but one of its US rivals and gained market share for the sixth consecutive quarter.

A war of words has erupted between the two in the run up to today’s showdown as both sides battled for shareholder votes.

Barclays warned Bramson’s presence on the board would be “destabilising” and “destructive.”

Outgoing chairman John McFarlane also said Bramson’s interests were “misaligned” with other shareholders as his holding was hedged by time-limited derivatives limiting its exposure to a share price drop.

The bank’s comprehensive 1,500-word takedown prompting Bramson to break his months-long silence in an attempt to woo shareholders.

Hitting back after the bank announced a raft of leadership changes at its investment bank, Bramson said his “experience and temperament” would be a “strongly stabilising” influence on the board.

He attacked chief executive Jes Staley’s current strategy to commit more resources to the division, which he branded “untenable in the long run.”

He said the board’s strategy was yet to produce any positive shareholder returns and that sticking to it would lead to a “real threat” that fresh capital would be needed.

 

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