Compliance
Barclays' CEO To Be Reprimanded, Take "Very Significant" Hit To Compensation Over Whistleblower Case

The bank is acting after its CEO had sought to expose the identity of a whistleblower.
(Updates with reaction from House of Commons committee chairman)
UK-listed Barclays today announced
its board will formally reprimand chief executive Jes Staley, and
make a "very significant" change to his variable compensation
after he tried to identify a whistleblower last year.
A probe by Simmons & Simmons, the law firm, found that the CEO
“honestly, but mistakenly” thought it was acceptable for him to
find out who had written a letter, the bank said in a statement
today. The bank said Staley made an error in trying to identify
the author of the letter.
The UK's Financial Conduct Authority and Prudential Regulation
Authority - the two principal regulators in the UK - have started
a probe into the CEO's behaviour, and the controls and processes
adopted by Barclays.
At the centre of the case is the claim that Staley had tried to
expose the identity of a person who had alerted Barclays to a
personal matter about a senior executive, according to
Bloomberg, citing an unnamed source. Such an attempt to
expose a whisteblower could break US and UK laws.
In its statement today, Barclays said the matter came to light
early this year "as a result of a concern raised by an employee
regarding amongst other matters the adequacy of Barclays
whistleblowing procedures". Barclays said it immediately
instructed Simmons & Simmons to investigate.
The law firm found, and Barclays' board concluded that Staley
"honestly, but mistakenly, believed that it was permissible to
identify the author of the letter".
"However, the board has concluded that Mr Staley made an error in
becoming involved with, and not applying appropriate governance
around, the matter, and in taking action to attempt to identify
the author of the letter. The author of the letter was not
identified and no further action was taken. Mr Staley has
apologised to the board for his error," the statement said.
"The board believes that its response to the matter should be
proportionate to its serious nature. It will therefore be issuing
a formal written reprimand to Mr Staley and has decided that a
very significant compensation adjustment will be made to Mr
Staley's variable compensation award. The board will give
consideration to the findings of the FCA and PRA investigations
and the precise amount of the compensation adjustment will be
determined by the board once those investigations have
concluded," the statement said.
"The board is also commissioning independent reviews of Barclays
relevant processes and controls, including its whistleblowing
programme. The board continues to review the position of other
employees involved in this matter," it said, but did not identify
those employees by name.
John McFarlane, the bank's chairman, said: "I am personally very
disappointed and apologetic that this situation has occurred,
particularly as we strive to operate to the highest possible
ethical standards."
Parliament
UK lawmaker Andrew Tyrie, who is chairman of the House of Commons
Treasury Select Committee, said he and fellow members of
parliament intend to look into the Barclays case.
“Parliament is behind a significant shift in attitudes towards
whistleblowing in the financial sector. In 2013, the
Parliamentary Commission on Banking Standards identified the need
for financial services firms to have robust and effective
whistleblowing procedures, recommending that a non-executive
board member should be given specific responsibility for the
effective operation of the firm’s whistleblowing regime,” Tyrie
said.
“The Senior Managers and Certification Regime is supposed to
ensure that whistleblowers are protected. This is the first
proper test of those rules, and it is for the regulators to test
whether Barclays had the right processes in place. The Treasury
Committee will take a close interest in the regulators’
conclusions,” he said.