London - Barclays named former JPMorgan Chase & Co senior banker Jes Staley as chief executive officer as Britain’s second-largest lender seeks to boost returns battered by rising legal costs.
Staley, 58, will take over on December 1, the London-based bank said in a statement on Wednesday. At the peak of his 34-year career at the company, which included roles running JPMorgan’s asset-management and investment-bank units, he was seen as a candidate to succeed Jamie Dimon in the top job.
“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,” chairman John McFarlane said in the statement. “In particular, he understands corporate and investment banking well, the re-positioning of which is one of our major priorities.”
Staley compensation
The appointment comes three months after McFarlane fired Antony Jenkins as CEO after growing frustrated with the pace of change at what he called a “cumbersome and bureaucratic” lender. He has since pledged to press on with cost cuts and double the share price within three to four years, even as the bank faces rising costs for misconduct and tougher capital requirements.
Barclays shares were little changed at 249.95 pence at 9:07 a.m. in London. They have increased about 2.6 percent this year after dropping 10 percent in 2014.
Staley could earn as much as 8.25 million pounds ($13 million) a year at Barclays in total compensation, according to a spokesman. He will receive fixed pay of 2.75 million pounds, split between a 1.2 million-pound basic salary, 1.15 million pounds of role-based-pay and a 396 000-pound pension. That’s about 14 percent more than his predecessor Jenkins, a former retail banker.
He could earn incentive pay of up to 5.5 million pounds, including a 2.2. million-pound bonus in cash and shares, and a long-term incentive plan that could reach 3.3 million pounds in shares paid three years later, the spokesman said. Staley also got 1.93 million pounds of Barclays stock to buy him out of his unvested share award at JPMorgan, according to the statement.
‘Right man’
Michael Rake, who leads the nomination committee, said in the statement that the board was “unanimous in our view that Jes Staley is the right man for that role.”
Barclays must “continue the focus on shareholder returns which John McFarlane has mandated,” Staley said in the statement. “Barclays is a very valuable franchise: from its retail and commercial banking presence in the UK, its strength in cards and payments, its strong position in Africa, to its investment bank.”
Staley will become the second former head of JPMorgan’s investment bank to take the helm of a British lender this year. Bill Winters, who led the unit before Staley, became CEO of Standard Chartered Plc in June.
‘Client guy’
McFarlane has described Staley as “a client guy” who wasn’t a trader, but managed JPMorgan’s investment bank and has a background in commercial banking.
In a memo to staff on Wednesday, Staley said that he plans to “complete the cultural transformation” at the bank, while adopting a “less capital intensive model” at the securities unit.
“We will complete the necessary transformation and repositioning of the investment bank,” he wrote. “We are a commercial enterprise and must generate attractive returns for our shareholders. They have been patient and now we must deliver for them. We have the means and assets to get there, and I am optimistic for our prospects.”
Barclays is scheduled to report third-quarter earnings on Thursday. Pretax profit, including restructuring costs, may be little changed at 1.6 billion pounds from a year earlier, according to analysts at Investec Plc. Excluding those charges, profit will probably drop about 4 percent to 1.8 billion pounds, “largely due to weaker investment bank revenues,” UBS Group AG analyst Ivan Jevremovic wrote in a note.
BLOOMBERG