World watches as Rock gets big name

Jul 24 2008 by Graeme King, The Journal

A SENIOR director of banking group Barclays yesterday agreed to take up the challenge of leading Northern Rock back to independence in the private sector.

Gary Hoffman, 47, will move to become chief executive at the Gosforth bank from his role as group vice-chairman of Barclays in London. He will start work on October 1.

Last night Mr Hoffman told The Journal he would not have quit his post at Barclays for any other job and was excited by the challenge of leading a great set of people. The appointment was hailed as a positive move for troubled Northern Rock in hiring a big name from the banking world.

Ron Sandler, the bank’s executive chairman, will become non-executive chairman when Mr Hoffman starts work, while acting chief executive Andy Kuipers is to leave altogether.

The recruitment of Mr Hoffman follows the hiring of two other senior executives in recent weeks – Richard Smelt as human resources director and Rick Hunkin as chief risk officer.

Mr Hoffman said: “I am excited by the prospect of leading the company back to a position of strength, delivering our plan and returning Northern Rock to private ownership as a thriving, stable business.

“I have spent 26 years, man and boy, with Barclays, so it is quite a wrench to leave.

“I would not have left for just anyone – in fact anything else. Northern Rock has great local roots, a national identity and has become an international story, and the world’s eyes are upon it.

“When Ron approached me with this opportunity, I saw the unique circumstances that the company finds itself in. It was a challenge and an opportunity to lead a great set of people back to being a stable, thriving business.”

Mr Sandler said: “This is a major step forward for Northern Rock and I am delighted that Gary will join the board as chief executive. I spoke to a number of people who were possible candidates, but Gary was the outstanding individual.”

He said the Government, which currently underwrites Northern Rock’s finances, was aware of Mr Hoffman’s appointment and approved of it.

Mr Hoffman’s basic annual salary will be £700,000 and he will also benefit from Northern Rock’s ‘future incentive scheme’ which will be introduced later this year.

He will receive an additional £1.2m through three annual payments of £400,000 – the first when he starts work in October, as compensation for the loss of benefits at Barclays, as he is obliged to sever all ties with the business on joining Northern Rock.

Speaking about the salary package, Mr Sandler said: “We have reached agreement on the basis of what it takes to get an individual of Gary’s calibre.”

North East Chamber of Commerce chief executive James Ramsbotham said: “We are delighted with this appointment. Gary Hoffman is extremely well respected within the industry.

“For some time now, Northern Rock has been rebuilding confidence both within the banking sector and with the general public, and its ability to attract an individual with this pedigree will build upon those efforts.

“Northern Rock enjoys remarkable support within the region and Gary Hoffman will find the local business community will do all it can both to welcome him and support him as he continues to strengthen the bank.”

One NorthEast chief executive Alan Clarke said he looked forward to working with Mr Hoffman. Barclays chief executive John Varley said the decision to release Mr Hoffman from his contract had been made reluctantly.

The 90-day consultation on plans to make 2,000 of the Rock’s 6,000 staff redundant ends next week.

Hoffman CV

GARY HOFFMAN became vice chairman of Barclays Group in July 2006. Previously he was chairman of UK banking and chairman of Barclaycard following five years as its chief executive.

In his other roles, Mr Hoffman had responsibility for service and sales to retail customers in the UK, and set up Barclaycall (telephone banking) and internet banking.

He was appointed to Barclays Group executive committee in 2001 and to the board of Barclays plc and Barclays Bank plc as an executive director in 2004.

He is on the boards of Visa Europe and The Journal publisher Trinity Mirror, and is a trustee of the Charities Aid Foundation. He is also a trustee of Barclays Bank UK Retirement Fund.

Mr Hoffman joined Barclays in 1982 after studying economics at Cambridge University. Married with two children, he is vice- chairman of Coventry City FC, his home town football team.