E*Trade names former Barclays exec Idzik as CEO
NEW YORK (Reuters) - E*Trade Financial Corp, the online brokerage firm that has been struggling to overcome years of lending losses, appointed Paul Idzik as its new chief executive on Thursday.
Idzik, 51, a former Barclays chief operating officer, will assume the position on Tuesday when E*Trade announces its fourth-quarter results. He will be the fifth chief executive of the struggling online bank and brokerage since 2009.
He will receive an annual base salary of $1 million and restricted stock currently valued at $9 million that vests over four years, E*Trade said in a regulatory filing. Idzik is also eligible for an annual performance bonus of up to $4.5 million.
Idzik, an American who served at Barclays' London offices from 2004-08, was most recently group chief executive of DTZ Holdings Plc, a corporate real estate services firm in London. He resigned shortly before the embattled firm was bought by Australia's UGL Ltd in late 2011.
A source close to E*Trade said Idzik, who early in his career was a consultant at Booz Allen Hamilton, was chosen for his strong leadership skills.
Hedge fund firm Citadel, which injected $2.5 billion into E*Trade in early 2008, in 2011 pressured E*Trade's board to sell the company, a proposition rejected by his fellow directors. Griffin, who has sold some of the stake, declined through a spokeswoman to comment on Idzik's appointment.
E*Trade, known for its humorous advertisements featuring a baby with adult investment concerns, lost hundreds of millions of dollars on bad mortgage loans between late 2007 and last year.
It had diversified from being a core discount brokerage firm in the 1990s under a strategy by former CEO Mitch Caplan that saw banking as a balance to the more volatile world of brokerage.
Caplan is now chief executive of Jefferson National, which sells annuities through insurance agents and advisers.
E*Trade has returned to its founding strategy of being a core retail brokerage firm while winding down the mortgage portfolio that has been the albatross around its neck since the housing market collapsed in 2007. Company executives have said they will not offer any new banking products.
The New York City-based company eked out a profit of $157 million in 2011 after four straight years of losses. It lost money in the third quarter of 2012 after being profitable in the first half of the year.
At Barclays, Idzik developed a reputation for eccentric behavior, according to British newspaper reports when he left in 2008.
He reportedly vaulted over security barriers at the bank's headquarters to test the reaction of guards and snapped the pen of a subordinate because it had another bank's logo on it. He also once filled up a whiteboard at a meeting, and continued writing notes on a window, according to the reports.
However, Idzik won the confidence of top Barclays executives. After serving as chief operating officer of Barclays Capital - the investment banking division run at the time by fellow American, Robert Diamond - Idzik was promoted to the same position at the bank holding company.
When he left in 2008, he denied reports that he was tired of trying to mediate between the ambitions of Diamond and commercial banking boss Frits Seegers. Diamond, who ultimately became CEO, was fired last summer over the Libor scandal.
A spokeswoman for E*Trade said Idzik and other executives were not available to comment.
Shares of the brokerage, which have gained 2.5 percent over the last year, rose 1 cent to close at $9.87 on Thursday before Idzik's appointment was confirmed.
(Reporting by John McCrank, editing by G Crosse and Nick Zieminski)