For years, Barclays of Britain fought to become one of Wall Street’s elite investment banks, including by buying the remains of Lehman Brothers’ American operations.
But as Barclays moves to shrink its investment bank’s size and ambitions, one of the leaders who spearheaded that growth campaign plans to leave, taking the bank further from its goals.
The company said that Hugh E. McGee III, head of its business in the United States, will leave on Wednesday, becoming the latest in a series of senior executives to depart in the last two years.
The move comes as regulators force foreign banks to keep more of their assets in the United States — an effort meant to protect their American operations — and as Barclays looks to drastically reshape its business and cut costs. The bank is expected to unveil its plans for the restructured investment bank on May 8 — two days after it reports its first-quarter results.
That tension has worn down many within the investment bank, as employees have been grumbling over their pay packages. Barclays executives have been forced to defend the bonus payments in the investment banking unit to its shareholders and a public upset over what it saw as excessive payouts. Mr. McGee, a laconic Texan who goes by Skip, finally had enough.
“My focus has always been on clients, but given the need for Barclays leadership to focus on regulatory issues for the foreseeable future, I have decided that it is time for me to move on to new challenges,” he said in a statement.
While Mr. McGee has held discussions with a number of suitors, he does not have a job lined up yet, according to a person briefed on the matter.
He arrived at Barclays when the firm bought the bulk of the investment banking operations of Lehman Brothers during the financial crisis of 2008 — a deal that he had helped orchestrate. By then, Mr. McGee had already become one of Lehman’s top deal makers, who had advised on transactions like XTO Energy’s $31 billion sale to Exxon Mobil.
He was named Barclays’ chief executive of corporate and investment banking for the Americas in October 2012 and chief executive for the Americas in May 2013.
Mr. McGee’s star ascended as Barclays began a quest to become a world-class investment bank, a long-held dream of the unit’s previous chief executive, Robert E. Diamond Jr.
Benefiting from an infusion of talent from Lehman, the bank moved up the league tables and looked poised to challenge larger banks for business. (Barclays still ranks seventh in terms of global announced mergers and acquisitions activity so far in 2014, according to data from Thomson Reuters.)
“We’ve long had a big-boy M.&A. business,” Mr. McGee told The New York Times in an interview in 2011. “And now we’ve got a big-boy checkbook.”
But the British lender’s reputation suffered in 2012 after it became the first bank to admit to wrongdoing by its employees in the manipulation of global benchmark interest rates, including the London interbank offered rate, or Libor. Barclays paid $450 million in penalties to British and American regulators in June 2012.
Shortly thereafter, Mr. Diamond left the bank under pressure from British regulators.
At the same time, the bank, which, unlike several of its British competitors, did not take government bailout money during the financial crisis, has nonetheless recently become a frequent target of politicians and shareholders dissatisfied with the banking industry’s pay practices and perceived excesses.
After facing a potential talent drain by aggressive competitors in the United States and other regions, Barclays increased its compensation pool to 2.4 billion pounds, or about $4 billion, in 2013 despite a steep fourth-quarter loss. Shareholders expressed their frustration over the bank’s pay policies during a lengthy and heated annual meeting in London last week.
The pool remained £1.1 billion lower than it was in 2010, but that has not quelled shareholders.
Mr. McGee, one of the bank’s highest-paid employees, received stock awards worth £8.9 million in 2013.
He will be replaced by Joseph Gold, global head of client capital management. Mr. Gold, who joined Barclays from Enron in 2002, will take on the restructured role of chief executive of the Americas.
Barclays is in the middle of a painful restructuring begun last year to cut costs and reshape the bank. It plans to eliminate as many 12,000 jobs this year, or about 8 percent of its work force.
“The future for Barclays will be as a strong, focused international bank. And the investment bank will be an important part of that mix,” Barclays’ chief executive, Antony P. Jenkins, said at last week’s annual meeting. “A strong investment bank in Barclays is good for the business, good for shareholders and good for Britain.”
After the overhaul, Barclays is expected to be smaller and focused on higher-return, less-risky businesses.
The changes come during a challenging operating environment for Barclays. In February, it reported a big fourth-quarter loss of £514 million, which was driven in part by restructuring costs and a £331 million charge for litigation and regulation penalties.
Last week, Mr. Jenkins said the challenging trading environment in the second half of last year continued into the first quarter in the fixed income, currencies and commodities business, with “a significant year-on-year reduction” in income in the business. But, he said, the bank’s efforts to control costs had helped offset lower income in that business.
A version of this article appears in print on 04/30/2014, on page B1 of the NewYork edition with the headline: Top Officer Of Barclays In America Is Leaving.
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