Metro Bank faces shareholder concern ahead of AGM


Ashley Hamilton Claxton, Head of Responsible Investment

13 April 2018

In a year when large corporate failures dominate the headlines, boardrooms should pay especially close attention to related party transactions such as the payments by Metro Bank to InterArch, owned by the wife of the bank’s Chairman, for design and branding services. 
We question whether Metro Bank’s Audit Committee has been sufficiently rigorous in its scrutiny of the payments made to InterArch. Our concerns about these transactions are heightened by the history of related party transactions between the Chairman and members of his family, while he was serving as a director in the US. In light of this, we’ll be voting against the reappointment of both the Chairman and the Chair of the Audit Committee at Metro Bank’s AGM this year.
Meanwhile, Metro Bank’s attitude towards pay looks opaque at best. The company has failed to disclose performance measures by which executives are being judged, and thus remunerated on, despite a previous commitment to disclose these. We’ll therefore be voting against the firm’s advisory remuneration report, along with the Chairman of the firm’s Remuneration Committee.

In a year when large corporate failures dominate the headlines, boardrooms should pay especially close attention to related party transactions such as the payments by Metro Bank to InterArch, owned by the wife of the bank’s Chairman, for design and branding services. 

We question whether Metro Bank’s Audit Committee has been sufficiently rigorous in its scrutiny of the payments made to InterArch. Our concerns about these transactions are heightened by the history of related party transactions between the Chairman and members of his family, while he was serving as a director in the US. In light of this, we’ll be voting against the reappointment of both the Chairman and the Chair of the Audit Committee at Metro Bank’s AGM this year.

Meanwhile, Metro Bank’s attitude towards pay looks opaque at best. The company has failed to disclose performance measures by which executives are being judged, and thus remunerated on, despite a previous commitment to disclose these. We’ll therefore be voting against the firm’s advisory remuneration report, along with the Chairman of the firm’s Remuneration Committee.

Past performance is no guide to the future. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.