Barclays is to freeze millions of pounds in share awards to its former chief executive as he contests the findings of a regulatory probe into his relationship with Jeffrey Epstein.

Sky News has learnt that the British bank’s board has decided not to allow a chunk of shares granted to Mr Staley several years ago to vest as scheduled, despite a significant rebound in the company’s performance.

The decision is understood to have been made in recent days as Barclays’ directors signed off the lender’s 2021 financial results.

The annual figures will be announced on Wednesday morning, when details of the former chief’s remuneration arrangements will also be disclosed.

Freezing the vesting of part of Mr Staley’s multimillion pound holding in the bank is not necessarily a sign that he will ultimately be forced to forfeit the shares, according to one pay consultant.

In its November announcement that he was stepping down as Barclays’ chief executive, the company said Mr Staley would leave because he wanted to contest the findings of inquiries by the Financial Conduct Authority and Prudential Regulation Authority into how he characterised his relationship with Mr Epstein to the bank.

At that time, it said he would receive his contractual entitlement to £2.4m in cash and shares – the equivalent of 12 months in fixed pay – as well as a £120,000 pension allowance and other undisclosed benefits.

It was unclear whether he would also be awarded an annual bonus for his work in 2021, although one shareholder said that a decision to do so would be “inflammatory”.

Media reports in November suggested that some investors were unhappy with Mr Staley’s payoff under the terms of his contract.

However, the roughly £2.5m severance deal pales by comparison with the value of the American’s shareholding in the bank.

According to Barclays’ 2020 annual report, Mr Staley held 9.47 million unvested shares that remained subject to performance conditions, and a further 1.9 million unvested shares not subject to any such conditions.

Collectively, at Tuesday’s closing share price, these awards would be worth more than £21.5m.

These are in addition to 5.73 million shares worth about £10m already owned outright by Mr Staley, according to last year’s annual report.

The shares frozen by the bank’s board are understood to include an award made in 2019 that was subject to its performance during the period between 2019 and 2021.

That award made as part of Barclays’ long-term incentive plan was worth a maximum of £3.3m.

Under rules introduced after the 2008 banking crisis, senior executives are required to hold onto those awards for several more years before being allowed to sell them.

Mr Staley and the City and banking regulators are likely to have been informed of the Barclays board’s decision not to release the latest tranche of shares to the former chief executive.

His departure in the autumn stunned the City, coming nearly six years at the helm – a period punctuated by controversy over his attempt to unmask a whistleblower, a battle with activist investors and, eventually, a victory for his commitment to maintain Barclays as a force in investment banking.

Mr Staley has not spoken publicly since then, although further details of the extent of his relationship with Mr Epstein have emerged to imply that they enjoyed a friendship.

The former chief was replaced by CS Venkatakrishnan, who, like Mr Staley, joined Barclays after spending much of his career at JP Morgan.

Barclays’ management ranks are also facing further upheaval with the departure of long-serving finance chief Tushar Morzaria.

Sky News revealed this week that Mr Morzaria would be replaced by his deputy, Anna Cross, with an announcement about the transition possible as early as Wednesday, alongside the bank’s results.

Barclays and a spokesman for Mr Staley both declined to comment on Tuesday.