The chief executive of Barclays has been grilled by shareholders at the bank’s AGM for the first time since he became embroiled in two separate scandals including attempting to identify a whistleblower.
Investors voted on whether Jes Staley should be re-elected to the bank’s board at the meeting on Wednesday, May 10.
Influential shareholder advisory group Institutional Shareholder Services (ISS) had told investors to abstain from the vote, but Mr Staley was re-elected with 97% of the votes cast and 14% of shareholders abstaining.
The BBC reported that Mr Staley apologised to shareholders at the meeting for using the bank’s security team to try and uncover the identity of a whistleblower, saying: “I made a mistake in becoming involved in an issue which I should have left to the business to deal with.”
Mr Staley faces having his bonus docked and investigations by the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) over the claims that he twice asked the Group Information Security (GIS) team to try and identify the author of two anonymous letters sent to members of the Barclays board and a senior executive in June 2016.
The letters raised concerns about a senior employee and Mr Staley’s knowledge of these concerns, as well as the way Mr Staley had dealt with the situation at a previous employer and the recruitment process followed by Barclays in hiring the senior employee earlier that year.
It is believed the letters refer to Tim Main, who worked with Mr Staley at JP Morgan and was hired in June 2016 as the chairman of Barclays’ financial institutions group in New York.
GIS, who contacted and received help from a US law enforcement agency, were unable to trace the whistleblower.
Mr Staley faced further controversy in May, after he backed his brother-in-law in a legal dispute with one of the bank’s biggest clients, private equity giant KKR .
According to the Guardian , KKR is no longer inviting Barclays to take part in some deals and may make a formal complaint to the bank’s board as a result. The Wall Street Journal revealed the dispute is about a Brazilian technology company called Aceco, which was founded by the family of his wife Debora Nitzan Staley.
She and her brother Jorge sold their stakes in the company to KKR in 2014, in a deal believed to have made the pair $240 million between them. However, in 2015 KKR fired Jorge, who was then Aceco’s chief executive, after allegations of fraud and wrote off its $475 million investment. Jorge has denied all the allegations.
The legal dispute between KKR and Jorge began after a company owned by Jorge bought a portion of Aceco’s debt, which would have allowed him to regain control of the company he had sold to KKR.
According to reports, KKR asked Mr Staley to listen to the findings of its fraud investigation in the hope he would persuade Jorge to settle. However, Mr Staley refused and instead introduced Jorge to a potential investor.
It is understood that Mr Staley has insisted he was acting in a personal capacity, but KKR has accused him of acting against the interests of a Barclays' client.
Over 97% of shareholders also supported the bank’s pay plans for top executives, despite corporate governance body Pirc advising investors to vote against the high salaries, including Mr Staley’s salary which was 49 times higher than that of an average Barclays’ employee last year.
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