Rich Ricci is no more. Despite being comparatively youthful and only recently telling Financial News he planned to go nowhere at all, the 49 year old banker with the comedic name has suddenly decided to take surprise retirement on June 30th.
Ricci's retirement may be a surprise, but it has an air of inevitability. Barclays says he's retiring and didn't immediately return a call for elaboration, but we suggest that these may be the real reasons why Rich is going now:
Once upon a time, there was Bob Diamond, Jerry Del Missier and Rich Ricci.
Bob sat atop Barclays' investment bank (formerly known as Barclays Capital). Rich and Jerry sat below Bob and they were Bob's best friends. But Bob resigned in July 2012 and Jerry disappeared a few weeks later. Only Rich stayed on.
Rich missed Bob and Jerry. According to the Financial Times, Ricci had a set of caricatures depicting himself and his lost friends on the windowsill of his office. Therein, the three men were depicted as weightlifters alongside the caption 'Global Domination.'
With Del Missier and Diamond gone, Ricci was left to pursue global domination all alone. In this context, success for Rich always looked a little unlikely.
When Diamond left, he was replaced by Antony Jenkins, a former retail banker. Jenkins likes to make wordy presentations full of managerial language like, 'Go-To Bank', 'clearer line of sight', 'sustaining forward momentum' and 'clearly delineated product sets.'
Ricci is a longtime investment banker. With the aid of Deloitte, Ricci conducted a business review titled 'Project Mango' (on the grounds that he liked Mangoes) but Ricci showed little obvious signs of enthusiasm for Jenkins' management-isms. At the bank's strategy day in February, Jenkins refused to endorse Ricci by name. We suspect some cultural dissonance.
The Salz Report on what went wrong at Barclays said the bank was guilty of paying its 70 top people 35% more than the market rate.
Ricci was one of these top people. In late March, he made £17.6m ($27m) from selling his Barclays shares. At the time, junior Barclays bankers told us they were peeved, particularly as the bank was preaching a new mantra of low pay. In the Jenkins era, Ricci was the poster boy for the excesses of the past.
Even as he leaves, Ricci's pay is being deemed generous: he won't collect any severance, but he will receive a full year's salary of £700k despite only working for six months of the year. This sounds reasonable - until you consider that Jerry Del Missier negotiated a cash severance package of £8.75m when he left Barclays. On the other hand, Del Missier is thought to have had his deferred stock clawed back, whereas Ricci leaves with his deferred stock intact.
Having sold £17.6m of shares from past bonuses the moment they vested, Ricci had little appetite for so-called, 'skin in the game.' Notably, Antony Jenkins only sold half his shares when they became available last month - and did so simply to pay the tax he owed on them. "We knew Rich was going once his sold his shares," one senior Barclays banker told us. "It was a case of when, not if."
Ricci was an important stabilising force for Barclays' investment bank in the wake of Bob Diamond's departure. However, he didn't have the 'Bobtimistic' qualities of his forebear. "He was a popular figure, but no one thought he was Bob," said one Barclays insider. As such, Ricci was always likely to be dispensable once it became apparent that Barclays investment bank wasn't going to fall apart after all.
In the press release accompanying the announcement of Ricci's exit, Antony Jenkins said his main focus since becoming chief executive of Barclays has been to, 'streamline and improve how the bank is managed, while strengthening control.'
Ricci was in charge of Barclays' biggest business - the investment bank - which generated 40% of the bank's revenues in 2012. We suspect that Jenkins wanted his own man/men in charge of this key business - not Bob's.
Jenkins is in a good position to start throwing his weight around at Barclays: the bank's share price has risen nearly 60% since he was appointed at the end of August. Barclays' investment bankers may not like Jenkins' verbosity or the deposition of their former leader, Ricci, but they can take solace in the fact that their deferred bonuses are now worth a lot more than they were previously. Jenkins was able to depose Rich without risking an uprising.
Ricci stayed around for long enough to assess the viability of different business lines in the investment bank and to put together his 'Project Mango' strategy presentation. He also stayed around for long enough to ensure that Barclays didn't haemorrhage staff straight after bonuses were paid. And he stayed around long enough to cash in a lot of his deferred bonuses. Apart from making Barclays the 'Go-To Bank', there may not have been much else for Ricci to look forward to.
Rich joined Barclays in 1994. Nineteen years at one firm is a long time, especially if you're an investment banker.
With his unfortunate parodic-name, his inappropriately-named horse ('FatCatintheHat'), his penchant for buying lottery tickets and his tendency to appear in bad photographs, Ricci was perceived as a bit silly in the British press. The Huffington Post has assembled a collection of disparaging photographs of him. There is probably no place for comedy bankers in the 'Go-To-Bank' of the future.
Ricci may not care unduly about his early retirement. He seems to be doing very-well-thank you from the horse racing business. Last week, he reportedly earned £465k, and split with his trainer Willie Mullins, after his horse won a race in Japan.