By John McCrank and Jed Horowitz
NEW YORK Jan 17 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
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
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
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
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.