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November 20, 2008

Barclays puts board up for re-election but still faces shareholder revolt

by Kay Murchie

Story link: Barclays puts board up for re-election but still faces shareholder revolt

Last month, Barclays declined financial assistance from the UK Government and instead announced it was to raise £7.3 billion, primarily from Middle East investors.

However, Barclays’ shareholders were believed to be infuriated at the generous terms offered to overseas investors and, as a result, the Association of British Insurers (ABI) was asked to get involved in order to negotiate a better deal.

Meanwhile, the board of Barclays (4 executive directors and 13 non-executives) are to put themselves up for re-election at its AGM next April, rather than just a third of them, which is normal practice.

The announcement is seen as a challenge to disgruntled investors to either offer their support or sack the board.

In a statement earlier this week, Barclays said a number of meetings and conversations have taken place with the bank’s largest shareholders. The discussions have been constructive and the board of Barclays has listened carefully to shareholders’ views.

Furthermore, the bank has promised to allow existing investors to participate further in the fundraising exercise, setting aside £500 million for a placing.

According to Barclays, by raising cash from Middle East investors, it is avoiding the restrictive terms that are attached to a Government bailout, and maintained it wanted to remain ‘strong and independent’.

The Government is to inject £20 billion into RBS while a further £17 billion will be pumped into Lloyds TSB and HBOS.

Finally, the bank said none of its executive directors will take a bonus this year.

 

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