Shareholder group ISS backs Barclays board over former CEO Staley

Published : 1 year ago, on 17/04/2023

Shareholder group ISS backs Barclays board over former CEO Staley

By Sinead Cruise

LONDON (Reuters) -Institutional Shareholder Services (ISS) has recommended Barclays investors re-elect all board members at next month’s annual meeting, sapping the momentum of protests against bosses for supporting former CEO Jes Staley who is being investigated over his links with sex trafficker Jeffrey Epstein.

The influential proxy advisor said in a report published on Monday that “questions may be posed” as to the board’s judgment in its decision to back Staley between 2019-2021, but it may be too soon for those questions to influence director elections.

Investors should instead await the outcome of various investigations into the matter, ISS said.

In a pre-meeting notice to investors last month, Barclays said that since Staley resigned in November 2021 it had received “no material new evidence” from authorities to challenge the findings of a regulatory investigation into how Staley characterised his relationship with Epstein.

At the time of his resignation, Barclays said the preliminary conclusions of investigations by British financial regulators into how truthful Staley was about his ties to Epstein made “no findings that Mr Staley saw, or was aware of, any of Mr. Epstein’s alleged crimes.”

Staley has acknowledged having been friendly with Epstein, but expressed regret for their relationship and has denied knowing about the financier’s criminal activities.

The notice also said Staley’s unvested long-term bonuses remained suspended pending further developments, adding that the board would “consider further action as appropriate”.

Staley, who joined Barclays in 2015 after more than 30 years at JPMorgan, has been named in two civil lawsuits lodged against the U.S. bank for enabling and concealing Epstein’s network. JPMorgan, in turn, has sued Staley over “outrageous” alleged conduct and breaching his duty of loyalty to the bank.

Staley’s lawyers have dismissed allegations that he hid what he knew about the late disgraced financier as “slanderous” and “false”.

EXECUTIVE PAY

Separately, ISS also said there may be “some scope” for further cuts to executive bonuses following a massive regulatory breach which led to the unlawful sale of $17.7 billion of structured products in the United States.

It did, however, describe actions already taken to dock variable pay earned by incumbent and former executives as “substantial” and “well explained”, and therefore worthy of “qualified support” from investors.

Rival advisor Glass Lewis on April 6 recommended shareholders vote against bosses’ pay in protest against long-term bonuses awarded to former executive Tushar Morzaria, who was serving as chief financial officer when the securities were sold in error.

Barclays docked bonuses earned by Morzaria and its current top executives by a combined 1 million pounds ($1.24 million) in February over the blunder.

Barclays paid a $200 million fine to U.S. regulators last year for “staggering” failures over several years that contributed to the breach and also forced the restatement of 2021 financial accounts.

($1 = 0.8061 pounds)

(Reporting by Sinead Cruise, editing by Lawrence White and Susan Fenton)