Barclays Plc shareholders could use the firm's annual meeting to press directors about their support for former boss Jes Staley, according to a report by proxy firm Institutional Shareholder Services.
Staley stepped down from the British bank in 2021 after U.K. regulators shared with Barclays the preliminary findings of a probe into what he disclosed about his relationship with deceased pedophile financier Jeffrey Epstein. These ties, cultivated when Staley led the investment bank at JPMorgan Chase & Co., are now at the center of legal proceedings.
"While it is accepted that the board could only act on the information available to it at the time, there are questions over the judgment exercised during this period, given the particularly disturbing nature of the charges against Epstein, and their potential for reputational damage to the company," ISS said in a report ahead of Barclays' AGM on May 3.
ISS recommended that investors support the reelection of all Barclays directors, adding that it's "perhaps premature" to fully answer questions about the board's judgment. "Developments in the investigations will be therefore monitored closely," ISS said.
The bank's decision to allow Staley to leave on good terms has come under fresh scrutiny in recent months as a number of U.S. legal cases reveal new details of his interactions with Epstein, including excerpts from hundreds of emails between the two men.
Last month, Barclays Chairman Nigel Higgins described the recent slew of Epstein allegations against Staley as "serious and new," in the lender's first update on the matter since the CEO's departure.
The bank's latest annual report notes how Staley received about £2.3 million ($2.8 million) during 2022 as his 12-month notice period ran its course. The 70% of his deferred pay that hadn't vested at the time of his departure has been suspended, and Barclays has said this will remain the case until there are further developments in the U.K. regulatory proceedings.
A spokesperson for Barclays declined to comment.
JPMorgan itself sued Staley in March via a third-party complaint, saying he should be responsible for any liability facing the bank in two lawsuits. Staley's bid to separate JPMorgan's suit against him from other cases was rejected this month.
Barclays disclosed news of a U.K. Financial Conduct Authority probe in February 2020, but Staley was allowed to continue in his role with the support of Higgins and the rest of the bank's board. Staley quit the following year, after regulators' preliminary findings suggested he had underplayed his relationship with Epstein. Staley is challenging the findings.
