Online brokerage

E*Trade

(ET) - Get Report

is rejiggering the makeup of its compensation committee in an effort to appease shareholders who are still angry about CEO Christos Cotsakos enormous pay package for 2001.

The company said in a statement Friday that it will add an independent director to its board and to the compensation oversight committee. The company plans to replace one of the previous members of that committee with a current board member, bringing the number of committee members up to four from three.

E*Trade's corporate governance committee will also conduct a formal review of all board processes and committee assignments at its next board meeting, the company said.

The changes will help E*Trade settle a shareholder lawsuit brought against it in December, the company said.

Last month, E*Trade revealed that Cotsakos received a $77 million compensation package in 2001, making him the brokerage industry's highest-paid executive in a year during which E*Trade lost $242 million. By comparison, Joe Moglia, CEO of rival Ameritrade, earned $6.5.million in fiscal 2001, while Goldman Sachs Group CEO Henry Paulson was paid $18.9 million, a 15% drop from the previous year, and Merrill Lynch CEO David Komansky saw his paycheck cut almost in half, to around $16.3 million.

Cotsakos agreed on May 10 to return $21 million to the company, and he will forgo his base salary for the next two years, while his bonus will be exclusively tied to company performance.

E*Trade shares have lost 13% since April 30, when Cotsakos' 2001 pay package was revealed. There were lately losing 1.9% to $6.59.