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Naguib Kheraj, chief executive of JPMorgan Cazenove, is expected to stand aside from the broking firm once today's £1 billion takeover by American bank JPMorgan Chase is completed.
While many of his Cazenove colleagues will make millions from the deal Kheraj is expected to take another senior role with JPMorgan and not cash in on his deferred shares in the broking firm. Instead they will roll over into JPMorgan deferred shares.
Sources close to the deal said that Kheraj would stay with the broking business for “several months” to oversee its integration into the investment bank but then would take another role.
“JPMorgan is a very big organisation with a lot of very big jobs for someone of his calibre,” said one insider. Another source pointed out that once the takeover was complete, Kheraj's position as chief executive of the broker would effectively no longer exist.
Kheraj, a former finance director of Barclays, only joined JPMorgan Cazenove 16 months ago. At the time the firm's chairman David Mayhew, who will collect about £19 million from today's sale, said one of his jobs was to help the broking side of the business use more of JPMorgan Chase's global services and products.
JPMorgan Cazenove was created as a joint venture between the US bank and the 190-year-old stockbroker to the Queen five years ago. JPMorgan held an option to buy out Cazenove's half by the end of this year.
Today's deal at around 535p a share values the business at £1 billion and is more than twice the 245p Cazenove shares last changed hands at. There are around 1500 shareholders including past and present employees.
Among the biggest payouts alongside Mayhew's will be for head of equities Alan Carruthers and finance director Michael Power who are in line for £5 million and £10 million respectively.
They are both expected to take senior positons within JPMorgan as will Cazenove's head of corporate finance Charles Harman and Ian Hannam the firm's main dealmaker and head of capital markets.
Reader views (1)
Bye bye Cazenove. The American destruction of the City is now complete. Say goodbye to respected independent advice, this parrot is dead. If Mayhew had worked on Wall Street he would have walked away with $190m not $19m. Quite stunning really. The JP Morgan culture is very different to Cazenove and many clients hung on whilst Mayhew et al stayed but the exodus had already begun. I would expect to see a new broking advisory business to take 50% or more of the JPMCaz clients over the next three years.
- James Macleod Ritchie, Oyster Bay Cove, 19/11/2009 12:35
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