The FCA (Financial Conduct Authority) and the PRA (Prudential Regulatory Authority) continue their investigation into Barclays’ statement characterising Staley’s relationship with Epstein.
The statement said it should be noted that the investigation makes no findings that Staley (pictured) saw, or was aware of, any of Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Staley following the arrest of Epstein in the summer of 2019.
The Board stated its disappointment, adding that Staley has run the bank successfully since December 2015, clarified the group strategy, transformed its operations and materially improved its results.
Barclays said: “The regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions.”
With effect from 1 November 2021, C.S. Venkatakrishnan (known as Venkat) will take over as group chief executive, subject to regulatory approval, and as a director of Barclays.
Prior to his appointment as group chief executive, Venkat served as head of global markets and co-president of Barclays from October 2020 and group chief risk officer from 2016 to 2020.
Before joining Barclays in 2016, he worked at JP Morgan Chase from 1994, holding senior roles in asset management including chief investment officer in global fixed income. He also held senior roles in investment banking, and in risk.
Venkat will receive fixed pay of £2.7m, delivered 50 per cent in cash paid monthly and 50 per cent delivered in Barclays shares as part of his remuneration package.
Staley is entitled to 12 months’ notice from Barclays so continues to receive his current fixed pay of £2.4m per annum delivered in cash and Barclays shares, a pension allowance of £120,000 per annum and other benefits until 31 October 2022 alongside eligibility to repatriation costs to the US.
Susannah Streeter, senior investment and markets analyst, 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. For the chief executive, Jes Staley, to step down following an investigation by city regulators into his dealings with Epstein, it’s clear the conclusions of the probe are critical. While the probe did not centre on Mr Staley’s role at Barclays but what he disclosed about his previous position at JP Morgan, what was under question was how he characterised his former relationship with the disgraced financier.
“Although detail is limited, it appears regulators believe there was a distinct lack of transparency over this relationship. It’s understood Staley will contest the conclusions, and clearly the board want to distance Barclays from what could be a long drawn out process.”
Barclays shares fell three per cent in early trading.
In May 2018, the FCA and PRA hit Staley with a £642,430 fine – or a tenth of his salary – for failings relating to a whistleblower at the bank.
Staley tried to uncover the identity of a whistleblower at the bank following an anonymous letter to Barclays in 2016 from someone who claimed to be a shareholder.
The letter contained various allegations, some of which concerned Staley. The regulators said that given his conflict Staley should have maintained distance and consulted with teams within Barclays with responsibility for whistleblowing, but he failed to do this.
The FCA and PRA added that he had not acted with due skill, care and diligence in his response.