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Barclays appoints Jes Staley as new chief executive

The American banker Jes Staley has been named as the new boss of Barclays on a pay package of just over £10m and immediately played down expectations of a revival of its troublesome investment banking arm.

The 58-year-old arrives at the bank amid a restructuring that was expected to result in 19,000 job cuts, as the investment bank was scaled back. Barclays is also preparing for new rules requiring riskier investment banking businesses to be ringfenced from high-street banking operations.

Staley, who will take over on 1 December, told staff he wanted to focus on bolstering returns to shareholders but also on ethical behaviour that was called into question as a result of the Libor rigging crisis. He also signalled an attempt at a collaborative, rather than an adversarial, relationship with regulators and a continued streamlining of the investment bank.

In a memo to staff he said: “I feel keenly we must continue to strengthen trust in Barclays. The trust of our customers and clients, reciprocated in our commitment and service to them, is the foundation of our success, the most valuable quality we can nurture and the key to unlocking shareholder value.

“We must therefore complete the cultural transformation of the group. There can be no retreat from becoming a values driven organisation which conducts itself with integrity at all times. My ambition is to restore Barclays to its rightful standing – successful, admired and well regarded by all.”

The veteran investment banker spent more than 30 years at JP Morgan before leaving in 2013 to join the hedge fund BlueMountain. He is not being bought out of his stake in the hedge fund but will just become a retired partner. Barclays is, however, handing him shares expected to be worth around £2m to buy him out of bonus schemes he still has from JP Morgan.

Staley will be on fixed pay of £2.7m a year – which includes a £1.2m salary and role based allowance to sidestep the EU rules on capping bonuses – as well as annual bonuses of up to £2.1m and a long-term incentive plan of £3.2m. If all those bonuses are met, Staley could receive up to £8m a year. He will also a receive a relocation allowance to move from the US.

He replaces Antony Jenkins, who was ousted in July after three years attempting to restore Barclays’ fortunes after the Libor rigging crisis. Jenkins had focused on the ethics inside the bank and faced criticism after warning it faced a “death spiral” of staff departures when he tried to restrict bonuses.

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Staley told employees there would be a focus on personal, corporate and digital banking, as well as the business in Africa, and Barclaycard. “We will complete the necessary transformation and repositioning of the investment bank to a less capital intensive model,” he said.

Staley had been considered for the role at the time Jenkins was appointed to replace another US investment banker, Bob Diamond, but the bank went for the safer option at a time of heated debate about the role of bankers following the Libor rigging crisis. Staley has resigned from a non-executive position at the Swiss bank UBS.

John McFarlane, who became chairman this year and has promised to boost returns to shareholders, had been the interim chief executive.

McFarlane said he knew Staley well as a result of the recruitment process. “We are in agreement on the way forward. He is a man of enormous integrity, and someone who both understands the business, but also the importance of cultural reform and the need to conduct our business in a way that we can all be proud of,” he said.

“In Jes Staley we believe we have an executive with the appropriate leadership talent and wide-ranging experience to deliver shareholder value and to take the group forward strategically.”

The recruitment of Staley was overseen by the nominations committee, chaired by non-executive Sir Mike Rake who intends to leave the bank.

Rake said the committee was unanimous in picking Staley. “This is a huge, complex, and challenging role, leading one of the largest and most important financial institutions in the world, and my colleagues and I took the responsibility of finding an outstanding leader for Barclays extremely seriously,” he said.

Source: https://www.theguardian.com

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