Hugh (Skip) McGee III is stepping down from his role as CEO of Barclays America as part of the bank’s plans to create an intermediate holding company to comply with the Dodd-Frank Act.
His resignation can be interpreted in a few ways. As a seasoned investment banker, a formidable deal-maker and Barclays’ most senior client-facing banker, it’s a change of the old guard. McGee is the last senior ex-Lehmanites at Barclays, who has spent a combined 21 years bringing home the bacon at both firms.
His replacement is Joe Gold, the head of Barclays’ Client Capital Management division – the brakes to the trading floor’s accelerator – who oversees the bank’s management of credit risk and capital. It’s a clear message about Barclays’ intention to scale back its reliance on investment banking, to clear out the big-swingers who did so well under the house of Bob (Diamond).
Or maybe, just maybe, it’s indicative of Barclays’ refusal to pay pre-crisis-style pay packets. Looking at this year alone, McGee received £8.87m in stock bonuses for 2013, easily outstripping the £3.82m given to CEO Anthony Jenkins and the £3.81m awarded to the co-head of the investment bank, Tom King. Only Eric Bommensath, the trading focused co-head of Barclays’ investment bank, received a comparable sum of £8.56m.
But McGee is accustomed to these substantial pay packets. In 2008, at the height of the financial crisis while most senior investment bankers made public proclamations to eschew bonuses, McGee negotiated a hefty $25m a year contract to remain as head of the investment bank at Barclays following its takeover of Lehman Brothers, where he was global head of the investment banking division.
According to author and former Goldman banker, William Cohen, this made him the highest paid individual on Wall Street at the time. For Barclays, which is trying to assume a position of extreme prudence over pay, despite Antony Jenkins’ comments on avoiding a ‘death spiral’ of talent departures by paying competitively, McGee’s departure seems like a major concession to shareholders.