Barclays has issued a plea to shareholders to reject Ed Bramson’s bid for a seat on the board, warning his presence would be “destabilising and destructive” to the bank.
The bank published a comprehensive 1,500 words explanation as to why shareholders should fend off the activist investor’s advances at its AGM in May.
Bramson, whose investment vehicle Sherborne Investors holds more than a five per cent stake in the bank, has previously called for Barclays to downsize its investment banking division.
Ahead of the vote, outgoing chairman John McFarlane said the US-based investor’s presence on the board would be “detrimental” to the bank and its shareholders.
“We believe Sherborne and Bramson would likely seek to undertake a new round of restructuring and review, which, in our view, would significantly destabilise the group, impede the group’s progress and result in a destruction of shareholder value,” McFarlane said.
He added that Bramson’s presence on the board, given his track record, would be “unnecessarily destabilising” and that the activist investor had not brought forward any suggestions which management had not already dismissed as being unfeasible or value destructive.
He 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.
Aviva, a key ally of the British-born investor and a top 40 Barclays shareholder, told City A.M. it still planned to vote against Bramson and that his pursuit had “no merit.”
Bramson’s initial efforts to become a non-executive director were rebuffed last year.
After becoming frustrating that his concerns were not being listened to, he called a shareholder vote to muscle his way onto the board.
“After considering the situation carefully we do not have confidence that continued engagement with the company, strictly as an outsider, will produce any more measurable results in the future than it has to date,” he said in a letter last year.