May 9, 2019 / 11:45 AM / 2 months ago

UPDATE 1-ISS advises Metro Bank investors block pay report, abstain in re-election of CEO and chairman

LONDON, May 9 (Reuters) - Shareholder advisory group ISS has advised investors in British lender Metro Bank to vote against its remuneration report and abstain in votes on the re-election of four key directors, including its CEO and Chairman.

ISS advised investors to abstain on motions proposing the re-election of chairman Vernon Hill, chief executive Craig Donaldson and directors Stuart Bernau and Eugene Lockhart.

The advisory group also advised investors to abstain in a vote on the reappointment of PwC as auditors.

Metro Bank has been plunged into crisis by a major accounting error disclosed in January, which has wiped more than 1.5 billion pounds ($1.95 billion) off its market value.

ISS said the incorrect risk-weighting applied to 900 million pounds worth of loans raised “serious concerns around the effectiveness of the group audit”, even though it was not technically within PwC’s remit.

It recommended abstention in the re-election of the four directors as it said they believed responsibility for the error sat with them, but noted regulatory investigations into the problems were ongoing.

ISS recommended a vote against the pay report as it said a 288,000 pound bonus awarded to chief financial officer David Arden was not warranted, though it said much of it is deferred.

The bank’s shares were down 9 percent at 1140 GMT at an all-time low of 536.5 pence. ($1 = 0.7702 pounds) (Reporting by Iain Withers, editing by Sinead Cruise)

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