AGM approves re-election as chair despite concern over bank’s payments to wife’s firm
The US founder of Metro Bank has fended off a shareholder revolt despite concerns about the close relationship between the challenger bank and his wife’s architectural business and his use of a £120,000 annual travel allowance.
Shareholder Royal London Asset Management had said ahead of Tuesday’s annual meeting that it would vote against Vernon Hill’s re-election as chairman after the bank paid £4.5m last year to Shirley Hill’s firm InterArch for design and marketing services. Investment adviser Glass Lewis also criticised the arrangement, under which InterArch has received £21m in total from the bank since 2010, saying it created a potential conflict of interest.
At the meeting, held at the bank’s offices in London, where a portrait of Hill, his wife and their dog hangs prominently by the reception desk, shareholders representing more than 96% of the votes cast backed Hill. All other resolutions were also passed overwhelmingly.
Only 12 shareholders were in attendance, with neither Royal London – which owns 0.44% of Metro Bank – nor Glass Lewis present. Hill said after the 20-minute meeting: “They would never show up here.”
The only shareholder to speak was Richard Harris, who gave his full backing to the Hills. “The relationship was stated right at the beginning of the company,” he said. “Glass Lewis should be focusing on misconduct in the banking sector, [not on] a clean company doing well.”
Metro Bank’s chief executive, Craig Donaldson, said the bank had held talks with Glass Lewis, but that Royal London had said it was too busy.
There were also reports over the weekend that Hill uses his £10,000-a-month company expense allowance to help pay for private jet trips from the US to London for himself and his wife and other InterArch executives, as well as a Mayfair flat.
Metro Bank said in a statement: “We do not pay for either a plane or apartment on behalf of the chairman. As outlined in the annual report, the chairman receives a gross allowance of £10,000 a month as a contribution towards his travel to and from the US, and towards his living expenses while he is in the UK.
“How he travels and where he stays is down to his discretion. Who travels with him and stays with him is not a concern of Metro Bank.”