Vernon Hill survives proxy challenge at Metro Bank in U.K.
Vernon Hill will remain chairman of Metro Bank in the United Kingdom after shareholders rejected calls for his ouster.
At the company's annual meeting in London Tuesday, about 88% of shareholders voted in favor of Hill’s re-election, the company said in a news release. The vote came after the proxy advisory firm Glass Lewis recommended against the re-election of Hill, and the advisory group ISS urged shareholders to abstaining from the vote.
Investors have become impatient with Hill and Metro Bank's management for their failure to reverse the bank's steep stock decline over the past year. Shares have fallen 80% in the last 12 months amid concerns about the bank’s business strategy, its elevated expense levels resulting from an aggressive branch expansion and, most recently, an error it made in the risk-weighting of commercial mortgages. British regulatory authorities are investigating the incident.
Hill has also come under fire for continuing to do business with his wife’s architectural firm — a dozen years after that relationship got him in trouble with U.S. regulators when he was chairman and CEO at Commerce Bancorp in Cherry Hill, N.J. (Commerce was sold to TD Bank in 2008.)
Several large investors have reduced their stakes in Metro Bank recently, though within the last week the bank has received commitments for nearly $1 billion in fresh capital, including $476 million from Norway’s sovereign wealth fund.
Metro Bank also said last week that it will cut ties with Hill’s wife’s company, which has provided architectural design services to the bank. Many investors had been calling for such a step in order to win back their confidence.
Hill founded Metro Bank in London in 2010. The bank has assets of £22 billion (U.S. $28.3 billion). Hill is also chairman of the $2.8 billion-asset Republic First Bancorp in Philadelphia.
Despite the show of shareholder support at Tuesday's meeting, the company said it was "disappointed" with the tally.
“Whilst the majority supported we are disappointed that some of our shareholders opposed these resolutions,” Metro Bank said in a statement. “We will continue to engage constructively with them over the coming months to fully understand the rationale for the opposition to these resolutions.”
Metro Bank shares rose 7.6% to 705.5 pence (U.S. $8.96) in Tuesday trading on the London Stock Exchange.