Business

Bramson betting on Barclays break-up

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This week's disclosure by Ed Bramson's Sherborne Investments of a 5.2 per cent voting stake in Barclays was accompanied by the now-usual platitudes about constructive relations with the board, spotting a company undervalue‎d by the stock market, and so on.

That's superficially plausible: Sherborne has already made a healthy return on the stock it began purchasing prior to Barclays' annual results, when it disclosed the earlier-than-expected commitment to increasing dividend payments again.

But Bramson isn't generally known for his passivity, and the perpetual promise of jam tomorrow from Barclays chief executives has made it surprising that an activist of his calibre hasn't emerged sooner.

The bank ticks many of the boxes required by a shareholder seeking the sort of shake-up that might prompt a valuation rerating.

Cut the numbers (cost-to-income ratio, profit per employee) whichever way you like, Barclays remains operationally and structurally inefficient. The gradual end of legacy financial penalties will help, but that benefit will be partly offset by the costs of implementing the new ring-fencing regime and continuing pressure on investment bank margins.

Jes Staley, Barclays’ chief executive, gave an interview to Bloomberg this week which inverted the usual order of a private rehearsal for a public explanation. He discounted the potential value of tearing up Barclays’ universal banking model, and said he was already able to hand out surplus capital to grateful shareholders.

But Bramson may also be betting that a change of leadership is likely (triggered by regulators, investors or board members), and that that will provide him with a window to exert much more robust influence.

In short: it's hard to see why an activist would park his tanks at Barclays' HQ at this moment unless they wanted the bank to go much further and embark on a full break-up.

Safestore wins ugly

Alan Lewis, chairman of the FTSE-250 logistics group Safestore, appears to be taking a leaf out of Jose Mourinho's coaching manual. The Manchester United boss has talked repeatedly, if distastefully, of the need to 'win ugly' during his side's recent stuttering run.

Safestore‎'s annual meeting on Wednesday was the corporate equivalent of winning ugly.

Its remuneration report won barely half the votes cast, while Claire Balmforth, the pay committee chairman, had the not very handsome margin of 53 per cent in her favour.

Her position is now untenable, having effectively been hung out to dry by Lewis.

Balmforth only took over as chair of the remuneration committee in 2016, by which time the ill-fated policy was already being dreamed up Safestore directors and their ‎pay advisers.

In governance terms, last year was a shambles for the ‎company. It withdrew its pay policy at the last moment, when it became clear it would lose the vote, then squeaked through the proposals at a subsequent EGM.

That was clearly insufficiently chastening for Lewis and co, since the contentious one-off stock awards were made anyway.

The AGM, held in the leafy Hertfordshire suburb of Borehamwood, has reinforced an inescapable paradox about Safestore: it might be adept at guarding customers' possessions, but it's certainly not a dependable repository for investors’ confidence.‎

Rotterdam or anywhere

What? Unilever's moving to Rotterdam? Come again? That just about sums up the reaction to ‎the FTSE-100's third-biggest constituent ditching its joint headquarters in the UK (although it was nothing to do with Brexit, of course).

Except, it turns out, Unilever won’t be establishing its new brass plate in Rotterdam, after all. People close to the company say the Dutch city has been wrongly used as shorthand for a relocation of its legal domicile to the Netherlands.

‎"They might just pick an office near Schiphol Airport and have done with it," my mole reports.

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