Skip McGee has gone. His untimely departure, ostensibly ahead of Barclays’ need to establish an ‘intermediate holding company for its US operation’ almost certainly has something to do with pay. As we noted earlier, Skip was very well paid indeed and Barclays has indicated that it doesn’t want to pay so much in future.
Needless to say, Skip came to Barclays via Lehman Brothers. As an M&A supremo, he was on the front line of negotiations with Bob Diamond when Barclays was sold. Now that Skip’s gone, other senior ex-Lehman bankers at Barclays seem likely to follow. However, the exodus may not be immediate – many ex-Lehmanites lost a large chunk of their net worth when their former firm went under and Barclays has been highly restrictive when it comes to paying cash bonuses. The departures are likely to take place over a period of years, not months.
From Barclays’ perspective, the departure of McGee and destabilization of the U.S. business looks challenging. Bernstein research analyst Chirantan Barua thinks the U.S. business is the key driver of profits at Barclays’ investment bank. There have already been signs of disquietude – only last week, Barclays invoked the now famous ‘death spiral’ and claimed that two thirds of the senior people its U.S. trading desk had threatened to leave for higher paying rivals in early 2013.
So who else is likely to go? If Barclays cuts pay and other New York-based ex-Lehmanites take a lead from McGee, we suggest some of the following names may be at the front of the queue:
1. Paul Parker, global head of M&A at Barclays. Parker is an ex-Lehman banker who, with McGee, helped negotiate Lehman’s sale to Barclays.
2. Gary Posternack, head of M&A for the Americas at Barclays. Posternack ran Lehman’s natural resources unit previously.
3. Eric Felder, the newly promoted head of markets at Barclays. Felder was previously head of global high grade credit, investment grade bond trading and head of global credit products at Lehman.
4. Kunal Maini, head of US dollar swaps trading at Barclays. Formerly the head of US dollar swaps trading at Lehman.
5. Drew Mogavero, the recently promoted co-head of credit trading at Barclays. A high yield specialist who joined from Lehman in 2008.
6. Albert Lin, head of US dollar exotic rates at Barclays. Joined from Lehman, where he was an associate.
7. Bill Cohen, vice chairman of investment banking at Barclays. Formerly head of global media at Lehman Brothers, where he worked for 20 years.
8. Steven Berkenfeld, head of industrial clean tech investment banking at Barclays. Spent 21 years at Lehman Brothers.
10. Christopher Conetta, global head of commercial paper at Barclays. Joined after 15 years at Lehman.