Michael O'Neill, a half- Belgian, former US marine, refused to take a pay cut to join Barclays from BankAmerica, the US banking giant where, as the chief financial officer, he held the number-two boardroom slot.
Mr O'Neill replaces Martin Taylor, whose sudden decision to leave one of British finance's plum jobs last November shocked the City and wiped billions off the bank's stock market value.
In his first year, Mr O'Neill, who is said to be worth $50m to $100m in his own right, is guaranteed pounds 2.3m in salary, allowances and pension contributions, making him one of Britain's highest paid chief executives. That is more than three times the pounds 738,000 Mr Taylor received, according to last year's annual report.
In addition, he is entitled, after three years, to an options package worth pounds 3.4m. which he can roll over if Barclays' share price does not rise fast enough. Barclays is also giving him a further pounds 5m of shares on top of the pounds 5m he is buying out of his own pocket.
His salary package comprises a base salary of pounds 850,000 with a performance- related bonus which, in the first year, is guaranteed. On top of this comes a pounds 175,000 annual allowance to cover the cost of moving with his wife and two sons from their home in San Francisco, and a contribution to his pension scheme of about pounds 425,000 a year.
Barclays Bank yesterday sought to defend the decision to pay a US-style package, insisting that it is necessary in a global market for top executives to receive the going rate for the job. A Barclays spokesman, Paul Barber, said yesterday: "We have literally scoured the world for the best person for the job. "We knew that would involve paying the market rate. We believe that we have reached a fair deal for both Mike and our shareholders, much of which is related to performance."
The size of the salary package will almost certainly outrage banking unions, whichrepeatedly contrast the huge boardroom pay packets with the diet of belt-tightening and redundancies that is increasingly the lot of ordinary banking staff.
It also comes at a time when the banking sector is under closer scrutiny because of the government inquiry that is now under way, headed by the former telecoms watchdog Don Cruickshank.
Mr O'Neill brings with him a fearsome reputation as a cost-cutter ,with a keen eye on the share price.
Most of his personal wealth has been amassed as a result of huge profits he made from shares and share options, first at Continental Illinois when it was taken over by BankAmerica, and then when it, in turn, merged last year with Nationsbank to become America's largest pure banking company.
"He does not make the `Forbes 400' [a wealth list published by the leading US business magazine] but he does not have to work.
"If he is not worth $50m I would be surprised," said Ray Soifer, a banking analyst at Brown Brothers Harriman, a Wall Street broking firm.
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