NEW YORK (
is looking increasingly likely to have to extend its search for a new CEO into 2010 to replace Don Layton, who is currently planning to resign at the end of the year.
"We have disclosed it is the Board's intent to have a new CEO in place by end of year, but that if there is a delay Don will help out as needed to ensure a smooth transition," wrote E*Trade spokeswoman Pam Erickson via e-mail.
Layton, a former
executive, stepped in as E*Trade's Chairman in November 2007, around the time that the company, reeling from exposure to mortgage lending, announced a $2.5 billion equity injection from hedge fund giant
Citadel Investment Group
. He added the CEO title in March of last year, as the company worked on raising new capital and managing its portfolio of troubled home loans.
Layton announced in September he would resign at the end of the year, signaling he had "accomplished what was needed for
him to end
his time as CEO on schedule," though some observers, including JMP Securities analyst Michael Hecht, have argued the turnaround
is not yet a certainty.
There has been speculation that E*Trade may be acquired, as
CEO Fred Tomczyk recently said at a media conference that an acquisition was "the best use" for TD Ameritrade's sizeable cash pile, and that the online broker would be interested in acquiring E*Trade. Any deal , however, would have to be "on the right terms with the right structure,"
two weeks ago.
A TD Ameritrade spokeswoman later told
the quote was taken out of context, and Hecht says he believes Tomczyk's comments were "blown out of proportion."
A number of analysts, including at JMP Securities and Raymond James, have said they think the deal chatter is overdone, but a recent note from Daniel Harris of Goldman Sachs suggests the delay in finding a replacement for Layton may be an indication a deal is being discussed. The report stated "the potential for an M&A transaction remains intact with improving metrics, and highlighted by the fact E*Trade has still not yet appointed a successor to outgoing CEO Donald Layton."
E*Trade's stock is flat since Sept. 8, the last trading day before Layton announced he would resign. The shares have narrowly outperformed most of the other online brokers during that time period, including TD Ameritrade,
Interactive Brokers Group
, however, has done a bit better, rising 1.2% since the Sept.8 close.
Written by Dan Freed in New York