June 21, 2012 / 10:31 PM / 8 years ago

UPDATE 1-AllianceBernstein extends CEO contract by 5 yrs

* CEO annual salary remains at $275,000

* Contract commences 2014, extends through 2019

June 21 (Reuters) - Asset manager AllianceBernstein LP said it extended the term of Chief Executive Peter Kraus by five years, starting January 2014, as the company looks to boost shareholder confidence in its operations.

“The clients want to know there is stability in management and they appreciate the work Peter and this team are doing,” board member Pete Smith told Reuters.

Kraus, a former Goldman Sachs partner, will continue to receive an annual salary of $275,000 as per the new contract, which does not provide for any cash bonus, the company said.

“There was some discussion about increasing the pay, or putting an annual incentive in ... but the board felt strongly that we want to align Peter with the unitholders,” Smith said.

Most of Kraus’ compensation is paid as equity units, which vest over the five-year agreement term and will be delivered at the end of the agreement.

Kraus has struggled to revive AllianceBernstein - which was hurt by the financial crisis - since joining as chairman and CEO in December 2008.

The company’s stock has fallen 37 percent over the past year, underperforming the broader Dow Jones Index of US Asset Managers, which is down 7 percent in the same period.

AllianceBernstein shares closed at $12.17 on the New York Stock Exchange on Thursday.

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