Metro Bank faces shareholder revolt

Metro Bank faces shareholder revolt

Shareholders in Metro Bank have been advised to reject the British retail bank's latest remuneration report and abstain in the vote of its directors amid ongoing concerns over accounting practices.

ISS, the prominent shareholder advisory and services group has recommended investors reject Metro's pay report on the grounds that it includes a £280,000 bonus for finance chief David Arden which ISS deems to be unwarranted."given recent shareholder experience".

In January Metro disclosed a major accounting error where incorrect risk-weighting was applied to £900m worth of loans which has subsequently seen £4.5bn wiped off its market value. 

In addition, ISS has also advised that shareholders abstain in a vote to re-elect four of its directors including chairman Vernon Hill and chief executive Craig Donaldson.

ISS has also voiced "serious concerns around the effectiveness of the group audit" and recommended a further abstention on the re-appointment of PwC as Metro's auditors. 

Metro's shares fell by 9% following the publication of ISS's advice and currently stand at an all-time low of 536.5 pence. Nor is ISS alone in its opinion. Another shareholder advisory firm Glass Lewis has issued similar recommendations.

To make matters worse for the challenger bank, Metro has also faced a heavy bout of short-selling, becoming the most shorted stock on the London market, according to Bloomberg. This is likely to affect Metro's efforts to raise £350m from investors to finance future activity. 

Metro did manage to stave off another investor rebellion in 2018 when some shareholders objected to multimillion pound payments to the architecture business of the wife of chairman and founder Hill. 

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