E*Trade CEO Stepping Down at Year's End
NEW YORK (
) --
E*Trade Financial's
(ETFC) - Get Report
Chairman and CEO Don Layton is stepping down at the end of the year after his contract expires, leaving the newly recapitalized online brokerage without a successor.
Layton, 59, was named E*Trade's chairman in late 2007 following the resignation of ex-chairman and CEO Mitch Caplan and in conjunction with the $2.5 billion capital infusion by Citadel Investment Group, E*Trade's largest stock and bondholder. Shortly afterward, Layton became the company's CEO and agreed to stay on through the end of 2009 to implement a turnaround plan and recapitalization of the company, E*Trade said in a release.
Under his tenure, E*Trade "raised significant amounts of new capital and liquidity, substantially reduced the company's balance sheet risk, re-energized the company's core online brokerage business, recruited key senior executives and reorganized the management and strategy of the company," the press release noted.
Layton will work in partnership with the board of directors to oversee the search for his successor. The company expects to name a new CEO before the end of the year.
"Despite facing unprecedented challenges, E*Trade has evolved under
Don Layton's leadership into a company that is poised to take advantage of new growth opportunities, particularly in its online brokerage business," Robert Druskin, E*Trade's lead independent director said in a statement.
E*Trade's capital and financial position has been precarious since the credit crisis unfolded. The online broker's banking subsidiary has been slammed by troubled home equity and mortgage loans and from significantly devalued mortgage-backed securities bought earlier in the decade.
Citadel took a large debt and equity stake in the company in late 2007. This past spring regulators forced E*Trade to raise its capital levels, setting off a $1.7 billion debt-for-equity exchange, with Citadel as the primary participant to exchange debt for E*Trade common stock.
Additionally, Citadel's founder and chairman Ken Griffin was given a seat on E*Trade's board in June.
Last month, Citadel announced that it planned to sell a large share of its equity holdings in E*Trade through a pre-arranged trading plan, but two weeks ago retracted its plan, after criticism by Wall Street.
Still, analysts have said that E*Trade's fundamental outlook has improved in recent months.
Shares were rising 2.4% to $1.69 in recent trading Wednesday.
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Written by Laurie Kulikowski in New York
.
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