Latest news with #DanielFrumkin
Yahoo
09-05-2025
- Business
- Yahoo
Metro Bank risks backlash as investor advisers warn over scheme that could hand CEO £60m
Metro Bank is at risk of a shareholder backlash, after two influential shareholder advisers warned over a complex bonus scheme that could hand chief executive Daniel Frumkin a £60m windfall. ISS and Glass Lewis – both prominent proxy advisory services that suggest how shareholders should vote on company policies at annual meetings – are concerned that the new long-term bonus will be linked to the bank's share price, which may climb regardless of how well bosses run the lender. The reports, published before Metro Bank's annual shareholder meeting on 20 May, suggest it could lead to excessive, and potentially unwarranted, windfalls for bosses including Frumkin. Related: UK ministers to meet bank bosses over lending to small businesses Under the new plan, a bonus would be paid out after five years depending on how high the share price climbs over the long term. Metro Bank's share price currently sits at about 110p, and would have to climb above 120p in three years' time for the bonus to kick in. A jump to 437p during that period could earn Frumkin a one-0ff payment of up to £60m. That would be a major windfall for a chief executive, who last year earned a total of £1.15m, thanks in part to a £153k bonus. Metro was first high street bank to open in the UK in more than 100 years when it was launched by the US billionaire Vernon Hill in 2010, attracted a wave of customers with dog-friendly branches and seven-day opening hours. But Metro Bank suffered in the years that followed. Its share price was all but wiped out in 2019 following a devastating accounting error the led to the resignation of it top executives and founder. It took a further dive in 2023 when it emerged the bank would need more cash from investors after it failed to convince regulators that Metro could be trusted to asses its own risks. Metro was forced into the hands of the Colombian billionaire Jaime Gilinski Bacal as part of a £925m rescue deal in 2023, leading to a massive turnaround plan that has involved more than 1,000 job cuts and a decision to close branches on Sundays. ISS said Metro Bank had 'not put forward a convincing case' to support the new bonus plan, while Glass Lewis said it had 'severe reservations about recommending shareholders support the remuneration policy at this time'. 'Participants may be eligible for extremely high payouts based largely on market forces,' Glass Lewis said. 'We generally prefer that incentive awards reflect underlying performance measures that correlate to long-term growth, with appropriate limits.' 'We recommend that shareholders vote against this proposal,' Glass Lewis added. Both proxy advisers recommended that shareholders reject a special resolution related to the new bonus scheme, as well as the wider remuneration policy. The remuneration policy, which is being overhauled outside the normal three-year cycle, also proposes a jump in annual bonuses that can now be worth up to 150% of salary, compared with 100% previously. The proposed change is likely to be voted through, given the bank is now 53% owned by Bacal, who also sits on its board. However, it could still result in an embarrassing rebellion from remaining shareholders. Metro Bank said in a statement: 'The remuneration committee's approach is based on the delivery of long-term growth generation and the continued turnaround of the bank. The proposed policy is fully aligned with shareholder's interests and the creation of shareholder value over a sustained period.' Metro has also been called out for falling short on gender diversity, as women account for just 27% of the board. That is shy of the 33% target set for FTSE 350 firms in line with the Hampton-Alexander review and 40% targets set by the FTSE Women Leaders review. ISS said it had given 'qualified support' for the Metro Bank chair, Robert Sharpe, as a result. Metro Bank pointed to a comment from its annual report stating: 'We recognise the benefits of having a balanced and diverse board which represents the views, experiences and backgrounds of our customers and colleagues. We are committed to increasing the diversity of our board over time and in line with our board succession plan.'
The Guardian
09-05-2025
- Business
- The Guardian
Metro Bank risks backlash as investor advisers warn over scheme that could hand CEO £60m
Metro Bank is at risk of a shareholder backlash, after two influential shareholder advisers warned over a complex bonus scheme that could hand chief executive Daniel Frumkin a £60m windfall. ISS and Glass Lewis – both prominent proxy advisory services that suggest how shareholders should vote on company policies at annual meetings – are concerned that the new long-term bonus will be linked to the bank's share price, which may climb regardless of how well bosses run the lender. The reports, published before Metro Bank's annual shareholder meeting on 20 May, suggest it could lead to excessive, and potentially unwarranted, windfalls for bosses including Frumkin. Under the new plan, a bonus would be paid out after five years depending on how high the share price climbs over the long term. Metro Bank's share price currently sits at about 110p, and would have to climb above 120p in three years' time for the bonus to kick in. A jump to 437p during that period could earn Frumkin a one-0ff payment of up to £60m. That would be a major windfall for a chief executive, who last year earned a total of £1.15m, thanks in part to a £153k bonus. Metro was first high street bank to open in the UK in more than 100 years when it was launched by the US billionaire Vernon Hill in 2010, attracted a wave of customers with dog-friendly branches and seven-day opening hours. But Metro Bank suffered in the years that followed. Its share price was all but wiped out in 2019 following a devastating accounting error the led to the resignation of it top executives and founder. It took a further dive in 2023 when it emerged the bank would need more cash from investors after it failed to convince regulators that Metro could be trusted to asses its own risks. Metro was forced into the hands of the Colombian billionaire Jaime Gilinski Bacal as part of a £925m rescue deal in 2023, leading to a massive turnaround plan that has involved more than 1,000 job cuts and a decision to close branches on Sundays. ISS said Metro Bank had 'not put forward a convincing case' to support the new bonus plan, while Glass Lewis said it had 'severe reservations about recommending shareholders support the remuneration policy at this time'. 'Participants may be eligible for extremely high payouts based largely on market forces,' Glass Lewis said. 'We generally prefer that incentive awards reflect underlying performance measures that correlate to long-term growth, with appropriate limits.' 'We recommend that shareholders vote against this proposal,' Glass Lewis added. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Both proxy advisers recommended that shareholders reject a special resolution related to the new bonus scheme, as well as the wider remuneration policy. The remuneration policy, which is being overhauled outside the normal three-year cycle, also proposes a jump in annual bonuses that can now be worth up to 150% of salary, compared with 100% previously. The proposed change is likely to be voted through, given the bank is now 53% owned by Bacal, who also sits on its board. However, it could still result in an embarrassing rebellion from remaining shareholders. Metro Bank said in a statement: 'The remuneration committee's approach is based on the delivery of long-term growth generation and the continued turnaround of the bank. The proposed policy is fully aligned with shareholder's interests and the creation of shareholder value over a sustained period.' Metro has also been called out for falling short on gender diversity, as women account for just 27% of the board. That is shy of the 33% target set for FTSE 350 firms in line with the Hampton-Alexander review and 40% targets set by the FTSE Women Leaders review. ISS said it had given 'qualified support' for the Metro Bank chair, Robert Sharpe, as a result. Metro Bank pointed to a comment from its annual report stating: 'We recognise the benefits of having a balanced and diverse board which represents the views, experiences and backgrounds of our customers and colleagues. We are committed to increasing the diversity of our board over time and in line with our board succession plan.'
Yahoo
09-05-2025
- Business
- Yahoo
Metro Bank faces backlash over £60m share bonanza for bosses
Metro Bank is the latest London-listed company to face a backlash over its pay plans after drawing opposition to a proposal which could see top executives paid up to £60m apiece. Sky News has learnt that Institutional Shareholder Services (ISS), the influential proxy adviser, has told the high street lender's investors to vote against its remuneration policy and a Shareholder Value Alignment Plan (SVAP) at its annual meeting on 20 May. ISS said in a report to clients - seen by Sky News - that the share award plan had the "potential to deliver outsized rewards". Money latest: "Performance is measured solely based on total shareholder return over a baseline value (80p for the May 2025 grant)," it said. "The use of share price targets, in general, may not necessarily reflect management performance. "Despite the remuneration committee's explanations, overall, the company has not put forward a convincing case to support the SVAP." The maximum potential payouts are dependent upon Metro Bank's stock hitting 437p - almost four times the level at which it is currently trading. Less than two years ago, Metro Bank came close to collapse, with regulators overseeing a private bailout of the high street bank, which was established in the wake of the 2008 financial crisis. This week, it released a trading update which showed that its financial and operating performance had improved markedly under Daniel Frumkin, its chief executive. Metro Bank said: "The remuneration committee's approach is based on the delivery of long-term growth generation and the continued turnaround of the bank. "The proposed policy is fully aligned with shareholder's interests and the creation of shareholder value over a sustained period." A source close to the company said the maximum payouts would only be triggered if its performance hit key hurdles over a five-year period.
Sky News
09-05-2025
- Business
- Sky News
Metro Bank faces backlash over £60m share bonanza for bosses
Metro Bank is the latest London-listed company to face a backlash over its pay plans after drawing opposition to a proposal which could see top executives paid up to £60m apiece. Sky News has learnt that Institutional Shareholder Services (ISS), the influential proxy adviser, has told the high street lender's investors to vote against its remuneration policy and a Shareholder Value Alignment Plan (SVAP) at its annual meeting on 20 May. ISS said in a report to clients - seen by Sky News - that the share award plan had the "potential to deliver outsized rewards". "Performance is measured solely based on total shareholder return over a baseline value (80p for the May 2025 grant)," it said. "The use of share price targets, in general, may not necessarily reflect management performance. "Despite the remuneration committee's explanations, overall, the company has not put forward a convincing case to support the SVAP." The maximum potential payouts are dependent upon Metro Bank's stock hitting 437p - almost four times the level at which it is currently trading. Less than two years ago, Metro Bank came close to collapse, with regulators overseeing a private bailout of the high street bank, which was established in the wake of the 2008 financial crisis. This week, it released a trading update which showed that its financial and operating performance had improved markedly under Daniel Frumkin, its chief executive. Metro Bank said: "The remuneration committee's approach is based on the delivery of long-term growth generation and the continued turnaround of the bank. "The proposed policy is fully aligned with shareholder's interests and the creation of shareholder value over a sustained period." A source close to the company said the maximum payouts would only be triggered if its performance hit key hurdles over a five-year period.
Yahoo
27-02-2025
- Business
- Yahoo
Metro Bank returns to profitability after cutting 30% of workforce
Metro Bank has returned to profitability after overhauling its costs by slashing the number of staff and selling a portion of its mortgage book. The lender, which secured a multimillion-pound rescue deal in 2023, said it had been a 'pivotal' year. Over the financial year, it made £80 million of annualised cost savings – primarily from reducing head count by more than 30%, from around 4,460 to 2,970. Metro Bank had originally said it would be cutting around a fifth of its workforce, but made additional reductions after raising its cost-saving target. The bank said it made an underlying pre-tax profit of £12.8 million for the six months to the end of December – a return to profitability after a £26.8 million loss the year before. The underlying figure strips out what it views as one-off costs from things such as the sale of assets and refinancing. On a statutory basis, it made a pre-tax loss of £212 million for 2024. Metro Bank secured a funding package worth £925 million in 2023, helping secure its future on British high streets. Colombian billionaire Jaime Gilinski Bacal became a majority shareholder in the group after contributing through his firm Spaldy Investments. The bank sold a portion of its residential mortgages, worth £2.5 billion, to NatWest last year, as part of efforts to move towards specialist mortgages and business lending. On Wednesday, it said it had agreed the sale of a £584 million portfolio of personal loans to an undisclosed buyer. Metro Bank said there had been some deterioration in lending balances due to borrowers being impacted by 'the macroeconomic environment including lower house prices, increased cost of living and higher interest rates'. The overall level of loans in arrears increased to 5.6% at the end of 2024, up from 2.8% in 2023. Daniel Frumkin, Metro Bank's chief executive, said: 'It has been a transformational year for Metro Bank as we made substantial progress against our strategy, ending the period ahead of guidance, profitable, and with strong momentum going forward. 'We have successfully continued our pivot towards higher margin business in the form of corporate, commercial and SME lending and specialist mortgages, while also taking significant steps to reduce our costs and optimising our funding model.'
