Hugh McGee to step down as head of Barclays' Americas unit

Move signals that CEO Jenkins is taking a hard line on compensation

Apr 29, 2014 @ 4:54 pm

Hugh “Skip” McGee, Barclays Plc's top-paid executive and one of the most senior dealmakers to join the British bank following its purchase of Lehman Brothers Holdings Inc.'s U.S. unit, is leaving as investors push the lender to curb bonuses.

Mr. McGee will step down as chief executive officer of the Americas division at the end of the month, London-based Barclays said in a statement Tuesday. The 54-year-old will be replaced by Joe Gold, global head of client capital management.

He's leaving as CEO Antony Jenkins prepares to outline his strategy for the investment bank on May 8. Barclays is under pressure to revive profitability at its securities unit and rein in costs, including pay. Mr. Jenkins, who took over as CEO after the bank was fined for rigging benchmark interest rates, is also trying to overhaul a culture that veered into arrogance and greed, according to a review commissioned by the bank.

“McGee was the guy behind a push for higher pay for bankers and with this move, Jenkins is taking a much tougher line on compensation,” said Christopher Wheeler, a banking analyst at Mediobanca SpA in London. “It will take longer to assess the collateral damage this may do to the franchise and what it means about Barclays's commitment to the U.S.”

'OUTSTANDING SERVICE'

Barclays said it's making the change as the Dodd-Frank Act requires it to set up a U.S. holding company, forcing managers to focus on regulation and compliance matters.

“Skip McGee has delivered outstanding service over the last 21 years, both at Barclays and previously at Lehman,” Mr. Jenkins said in the statement. “He has been the longest-serving head of investment banking on Wall Street, and our most senior client-facing executive, responsible for driving some of the industry's highest profile transactions.”

Mr. McGee was part of the team that sold Lehman's U.S. units to Barclays in 2008, and was among a group of top executives who negotiated agreements to stay. Mr. McGee's compensation was worth at least $15 million for one year, according to a colleague close to him who wasn't authorized to speak about pay packages. In March, the bank said Mr. McGee received a further 8.87 million pounds in shares, the most among the lender's 12 most senior executives.

Barclays Chairman David Walker was last week forced to defend the bonuses paid to investment bankers as 24% of shareholders voting at the bank's annual general meeting rejected the compensation awarded to executives for 2013. Mr. Walker said the lender was “losing people who were crucial to the future” of the bank.

(Bloomberg News)

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