Clash with Mayhew sees Verey depart from Cazenove after just eight months

David Verey, the deputy chairman of Cazenove, has departed suddenly after just eight months in the job as a result of a falling out with David Mayhew, the chairman of the illustrious City institution.

The development is a huge embarrassment to Cazenove, one of the most secretive firms in the City, as Mr Verey was taken on to be heir apparent to Mr Mayhew.

Mr Verey's departure throws open the question of who will ascend to the top job at Cazenove at a crucial time in its history. The firm, which is the broker to about half of the blue-chip companies in the UK, is planning to end 180 years as a private stockbroking house and float on the stock market.

Mr Mayhew, 62, yesterday said he had thought Mr Verey would be an "eligible successor" when he encouraged him to join Cazenove last June in one of the bank's most high-profile external appointments. Mr Verey joined one month after leaving his previous role, running the investment bank Lazard in London.

Despite the two knowing each other for many years, the arrangement did not work out. Mr Mayhew said: "Until you live together you don't know people well. There was more cultural difference than we thought."

Mr Mayhew quashed rumours that the main difference of opinion was over the fact that Mr Verey wanted the bank to sell itself rather than wait until the time was right to float it.

But observers believe that one of the major areas of falling out was over the way Cazenove is handling its impending float. Officially the bank says it is still on track to float by April next year, but it may postpone the move. Mr Mayhew said yesterday that the issue would be considered nearer the time, adding: "I'm not so blind as to not realise that the market conditions have changed a lot since November 2000, unfortunately for the worse."

It is thought that the cultural clash between Mr Verey, a merchant banker who is not adverse to taking risks, and other senior colleagues at Cazenove may have been over the timing of the float.

Mr Verey may have become frustrated about its pace and opposed further delays in the IPO. This attitude may have set him on a collision course with other senior managers at Cazenove, which is one of the City's oldest firms of stockbrokers and is famous for its conservative culture.

Observers also believe that Mr Verey wanted more face-to-face access to Cazenove's impressive list of clients than he received. This was because of the firm's habit of maintaining very close ties between existing senior managers ­ including Mr Mayhew ­ and Cazenove's customers.

Mr Verey, who left the bank yesterday, will not receive any severance pay but will keep the shares he was awarded when he joined, which are valued at £1.15m. He said in a statement: "I wish Cazenove well in its future and I am equally sad that the plans we had have not worked out."

Mr Mayhew stressed that the two men remained friends and that Mr Verey was a "very likeable guy", but said that, because he was not "gaining in happiness" in his role, it was best that the two part company.

The Cazenove chairman insisted that the departure of Mr Verey did not mean new blood was unwelcome at the bank, which tends to promote staff who have spent almost their entire careers in its hallowed halls. "I really welcome importing skills," Mr Mayhew said.

Mr Verey's resignation leaves Cazenove with its other joint-deputy chairman, John Paynter, a Cazenove veteran of more than 20 years. Mr Mayhew said he might appoint another deputy chairman, but was in no hurry to do so.