Barclays Confirms Jes Staley as CEO
By Max Colchester
Updated Oct. 28, 2015 8:14 a.m. ET
LONDON— Barclays PLC on Wednesday appointed former J.P. Morgan Chase & Co. banker James Staley as its new chief executive, with a mandate to eke out profits at its stuttering investment bank.
Mr. Staley, who will join Barclays on Dec. 1, will be tasked with pushing through a radical overhaul of the U.K. bank following pressure from regulators. In a letter to employees, he pledged to boost shareholder returns at the bank and reaffirmed the “repositioning of the investment bank to a less-capital-intensive model.”
The U.K. lender said Mr. Staley will receive a pay package worth up to £8.24 million ($12.60 million) a year.
Mr. Staley’s appointment, news of which was leaked earlier this month, marks the return of a U.S. banker to the helm of one of the U.K.’s last remaining universal banks.
The 58-year-old, known as “Jes,” worked his way up the ladder over more than three decades at J.P. Morgan, rising to run its asset-management unit before taking over the reins of its investment bank in 2009. He later joined hedge fund BlueMountain Capital Management LLC.
His investment-banking experience could prove key as Barclays looks to rejig its franchise.
“He understands corporate and investment banking well, the repositioning of which is one of our major priorities,” said Barclays Chairman John McFarlane. “After an extended process, I now know Jes well, and we are in agreement on the way forward.”
Mr. Staley joins at a bumpy time for Barclays. His predecessor, Antony Jenkins, was dismissed by the board this summer over concerns that he couldn’t push through the overhaul that the bank needed.
Among the challenges Mr. Staley faces is slimming down the lender’s investment bank, which was built up by U.S.-born former CEO Bob Diamond before his resignation in 2012. He will be tasked with pressing ahead with a plan to keep the investment bank’s assets to no more than 30% of the company’s total risk-weighted assets, down from just over half.
Barclays’s Asian and Latin American investment-banking operations are likely to come under scrutiny in the coming months as management continues to cut costs, analysts say. On Wednesday, a Barclays private-equity business specialized in energy and commodities investments announced a management buyout.
Mr. Staley’s peers believe his understanding of the complexities of investment banking will serve him well. “He was a leader during the most difficult days of 2008 and 2009, and he will carry those lessons with him as CEO,” said Daniel Pinto, the chief executive of J.P Morgan’s corporate and investment bank.
Nevertheless, last week Mr. McFarlane looked to play down Mr. Staley’s investment-banking credentials, as U.K. politicians voiced fears the bank would revert to an overreliance on the unit, the source of several damaging scandals.
“He is a client guy,” Mr. McFarlane said last week, pointing to Mr. Staley’s track record in asset management and private banking. Mr. Staley will have to get to grips with Barclays’s large corporate and retail banking business, a major source of profit.
In 2012, after leaving J.P. Morgan, Mr. Staley applied to become Barclays’s CEO but was rebuffed, in part because the British bank was worried about the public reaction to having to buy him out of his deferred J.P. Morgan shares.
Mr. Staley will be paid a base salary of £1.2 million and role-based pay of £1.15 million in shares. The bank will buy Mr. Staley out of his unvested J.P Morgan shares by giving him Barclays stock worth £1.93 million.
—Ian Walker contributed to this article.