British lender Barclays Plc (BCS) has ousted Chief Executive Antony Jenkins after three years in the post, saying on Wednesday it had decided new blood would help accelerate strategic change at the bank and boost shareholder returns.
The surprise move comes weeks after John McFarlane took over as chairman of the bank and signalled his intention to speed up its turnaround plan. McFarlane is to take over executive duties until a permanent successor is appointed.
Barclays said Jenkins, who had been promoted from head of retail at Barclays following the departure of Bob Diamond as the bank sought to scale back its investment banking activities, would receive a year’s salary of 1.1 million pounds ($1.7 million) plus 950,000 pounds worth of shares, a pension allowance of 363,000 pounds and other benefits.
He’ll also remain eligible for a pro-rata performance bonus for the current year.
McFarlane, appointed from insurer Aviva having overseen a radical turnaround there, faces a host of challenges as the British bank sector grapples with regulatory pressures such as a demand to separate domestic retail banking operations from riskier investment banking operations.
The decision to axe the CEO follows a period of lackluster results and uncertainty about the bank’s future structure.
“This announcement was not something that we have expected, but given John McFarlane’s history as a ‘hands-on’ chairman, it is perhaps not a big surprise,” said analysts at brokerage Shore Capital in a note which repeated a “buy” rating on the stock.
“If this move does indeed act as a catalyst for an accelerated improvement in Barclays’ financial performance, then this can only be a good thing,” the note added.
While lauding Jenkins’ role in steering the bank through a period of rapid change, Deputy Chairman Michael Rake said the board had decided Jenkins did not have the blend of skills required to take the company forward.
“We are leaving value on the table and a new approach is required. As a group, if we aspire to bring shareholder returns forward, we need to be much more focused on what is attractive, what we are good at, and where we are good at it,” he said in a statement.
“We therefore need to improve revenue, costs and capital performance. We also need to become more externally focused and deal with the internal bureaucracy by becoming leaner and more agile,” Rake added.
In a statement Jenkins said: “It is easy to forget just how bad things were three years ago both for our industry and even more so for us. I am very proud of the significant progress we have made since then.”
