Barclays is withholding shares worth as much as $29 million from former CEO Jes Staley, pending the outcome of an investigation by British banking regulators into his relationship with Jeffrey Epstein.
The bank said in its annual report published on Wednesday that it has suspended bonus and share payments to Staley while regulators probe his links to the financier, who killed himself in 2019 while awaiting trial on sex trafficking charges.
Staley owns 9.1 million unvested shares that are subject to performance measures, according to the annual report. He holds another 2.1 million unvested shares that are not subject to performance review. Those shares are worth roughly £21.3 million ($29 million) based on Tuesday’s closing price.
The American executive owns 6.8 million shares in Barclays (BCS) outright.
Epstein, a multimillionaire and convicted pedophile who was charged with sex trafficking by US federal prosecutors, died in a New York jail cell.
The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) are investigating the relationship between the financier and the former top Barclays banker. The probe is focused on how Staley had characterized the relationship to his employer.
Staley left Barclays last year after the bank was told the preliminary conclusions of the investigation. Staley is contesting those findings.
Barclays said Wednesday that it had suspended the vesting of the former CEO’s shares “pending further developments in respect of the regulatory and legal proceedings related to the ongoing FCA and PRA investigation.”
Before joining Barclays as CEO in December 2015, Staley worked for more than 30 years at JPMorgan (JPM), where he served as head of its investment banking division. His relationship with Epstein dated back to 2000, when he became head of JPMorgan (JPM)’s private bank.
“He was already a client. The relationship was maintained during my time at JPMorgan, but as I left Morgan it tapered off quite significantly,” Staley told reporters on a call in February 2020.
Asked then whether he regretted his relationship with Epstein, Staley said: “Obviously I thought I knew him well and I didn’t. And for sure with hindsight of what we all know now I deeply regret having had any relationship with Jeffrey Epstein.”
Staley had told the Barclays board that he had no contact with Epstein since becoming Barclays CEO.
Staley will receive his annual fixed pay worth £2.4 million ($3.3 million) in cash and shares, plus a pension allowance of £120,000 ($164,000) and other benefits until October 31, 2022, the bank said when he stepped down on November 1. He’s also eligible for the costs of relocating to the United States.
Barclays said Wednesday that it “does not currently expect to make further decisions” on the former CEO’s compensation “until the conclusion of … regulatory and legal proceedings.”
— Mark Thompson contributed reporting.