Bramson told to come clean on Barclays fees
Activist’s firm could pocket up to £100m
THE corporate raider demanding a shake-up at Barclays is being urged to come clean on how much he could earn from attacking the bank.
Edward Bramson’s firm could pocket as much as £100m in fees if he forces his way onto the bank’s board, according to City analysis seen by the Mail.
Sources close to Bramson’s business Sherborne Investors deny this much money is at stake but refused to divulge how much the firm would receive.
The 67- year- old activist is demanding a seat at Barclays’ top table and claims he can deliver a dramatic boost to its performance.
If he gets a chairman or executive director job, it would dramatically increase the fees earned by Sherborne based on a complex formula under the fund’s rules. One respected analyst suggests a top board job could deliver £101.7m in fees for the fund – £39.9m more than if Bramson is not in a senior role.
Sources close to Sherborne last night denied this figure is correct.
City commentator David Buik, of trading firm Core Spreads, said: ‘It seems as if there is a smokescreen over Sherborne’s fees. It’s not transparent at all, and without setting out how much he could earn I think he will have a hard time convincing investors to back his bid for a board seat.’
Sherborne is one of Barclays’ biggest shareholders, with control of a 5.51pc stake. It exists to seek out firms which are underperforming, invests in them and uses Bramson’s turnaround expertise to drive up the share price.
The fund earns an incentive payment based on how a target company’s share price performs, and this increases hugely if Bramson manages to get into a position of power on the board.
Barclays shares are worth 157.22p at present, giving the bank a total value of £26.9bn. This is far below the value of the assets Barclays owns, reflecting traders’ gloom about European banks.
If shares at Barclays rose to 250p – a closer reflection of its assets – and Bramson did not have a top board job, then Sherborne’s incentive fees would come to an estimated £30.1m, according to the analysis. But if he was chairman or chief executive, it is claimed the incentive fee would jump to £70m.
Bramson will also get a £20.1m basic management fee if he holds the shares for 28 months, the analysis suggests, the normal length of time he invests for.
Along with a share of Barclays dividends, and profits from eventually selling the stock, this would leave Sherborne in line for £101.7m if Bramson is on the board, it is claimed – or £61.8m if he is not.
Bramson’s fund does not state how much of any windfall he would personally be paid, but it is thought he stands to profit handsomely if the raid is successful.
Barclays declined to comment.