NEW YORK (Reuters) - Prudential Financial Inc (PRU.N), one of the largest U.S. life insurers, said on Wednesday its board named Vice Chairman John Strangfeld as chief executive and chairman.
Strangfeld, 53, is currently in charge of Prudential’s U.S. businesses and has headed its investment division.
He will succeed the current chairman and chief executive, Arthur Ryan, who will retire as CEO at the end of 2007 and as chairman in May 2008.
Strangfeld joined Prudential 30 years ago and, under his leadership, the investment division grew strongly. In total, Prudential had $637 billion in assets under management at the end of the third quarter and is second in size only to MetLife Inc (MET.N) among U.S. life insurers.
Strangfeld was in a race for the top spot with three other vice chairs, but the field was winnowed down to two this year when two resigned or retired. That left Mark Grier, who leads Prudential’s international business, as the other candidate.
Grier was named to the board as of Jan. 1 and both he and Strangfeld will head the office of the chairman, said Ryan, who had promised to announce his retirement plans by the end of 2007. Ryan’s salary and compensation in 2006 was $25.8 million, while Strangfeld’s was $11.4 million.
Analysts said that Strangfeld, while posting a good track record, would have his work cut out for him in replacing Ryan.
Ryan handled a scandal at Prudential’s joint brokerage venture with Wachovia Corp WB.N, paying $600 million to settle improper mutual fund charges with regulators in August 2006 and then bringing the unit to profitability.
“Strangfeld will face a different but equally difficult set of challenges,” said Donald Light, an analyst with Celent LLC. “He’s looking at a decline in the equity markets, uncertainty in fixed income, and the impact of a recession on Prudential clients’ wealth.”
Reporting by Ed Leefeldt; editing by Braden Reddall and Andre Grenon