Barclays Bank (BARC.L) said on Monday that its CEO Jef Staley has stepped down following the conclusion of the Financial Conduct Authority and the Prudential Regulation Authority investigation into his relationship with the late disgraced billionaire Jeffrey Epstein.
Barclays had been shown conclusions from the regulator following an investigation launched last year which have led to the agreement between him and the board.
The bank said in a statement: “In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays.”
The investigation was examining the “historical” links between Staley and Epstein, who killed himself in 2019 while awaiting trial in the US. The investigation goes back to when Staley ran the private banking arm of JP Morgan (JPM).
The bank said in February last year that Staley had offered an account of their business relationship. The board decided hte would be “unanimously recommended” for re-election at the bank’s AGM in May 2020.
Staley has run the bank since 2015.
Staley is entitled to 12 months’ notice from Barclays under his contract of employment and will therefore continue to receive his current fixed pay (£2.4m per annum delivered in cash and Barclays shares), pension allowance (£120,000 per annum) and other benefits until 31 October 2022.
The bank said CS Venkatakrishnan (known as Venkat) will take over as group CEO, subject to regulatory approval, and as a director of Barclays.
On appointment, Venkat will receive fixed pay of £2.7m, delivered 50% in cash (paid monthly) and 50% delivered in Barclays shares.
The shares will be delivered quarterly and will be subject to a holding period with restrictions lifting over five years. Venkat will also receive a cash payment in lieu of pension of £135,000 per annum.
The board has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago. As a result of which he moved from the position of group chief risk officer to head of global markets.
Barclays said that the board has “long been confident in Venkat’s capabilities to run the Barclays Group and is delighted to have such a strong internal candidate.”
The FCA issued a statement saying: “The FCA and PRA do not comment on ongoing investigations or regulatory proceedings beyond confirming the regulatory actions as detailed in the firm’s announcement.”
Barclays shares fell 2.8% lower at the opening bell in London.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The repercussions from the Jeffrey Epstein scandal stretch far and wide, and now Barclays finds itself at the centre of the storm. Sudden change at the top is always unsettling, and the departure of Mr Staley who propelled its successful investment banking expansion strategy may be particularly unnerving for investors, with shares falling 3% in early trading.”
Watch: What is inflation and why is it important?