Legg Mason close to naming new CEO: Report

Strategy unclear as firm deals with Peltz, who seeks breakup

Feb 11, 2013 @ 4:04 pm

By Jeff Benjamin

Legg Mason Inc. (LM) is rumored to be close to announcing a new chief executive at some point this week, wrapping up a five-month search and putting interim CEO Joseph Sullivan into a new role in the company.

Representatives at the Legg Mason did not respond to requests for comment, but the Wall Street Journal reported Monday that the company could announce its new CEO as early as Wednesday, along with a new independent board member.

The report was described as “puzzling,” by fund industry consultant Geoff Bobroff, who expected Legg Mason to leave Mr. Sullivan in place as the company continues to fend off a growing list of activist investors, including Trian Fund Management LP, which owns 9.5% of Legg Mason’s stock.

Trian founding partner Nelson Peltz has been a Legg Mason board member since 2009. Mr. Peltz did not respond to request for comment.

“I don’t understand why they just wouldn’t leave the interim CEO in place, because Peltz’s whole effort is to break up the company,” Mr. Bobroff said. “Why would anyone take a job that would arguably involve just watching the dismantling of Legg Mason?”

Mr. Bobroff said he did not know who the new CEO will be, but said the job probably would not appeal to a younger executive who could have his or her résumé damaged if the activist investors have their way.

More likely, Mr. Bobroff surmised, the job will go to a “gray hair,” meaning somebody closer to the end of a career.

Legg Mason’s total assets under management were last reported at roughly $650 billion.

According to the Journal report, the assets were at $1 trillion in 2008 when Mark Fetting took over as CEO. He resigned in October.

Legg Mason stock gained more than 1% on Monday, and saw trading volume reach the 2.2 million mark, which compares with an average daily volume of 1.6 million.

The stock, which has gained 7.1% from the start of the year, is up nearly 25% from a May 15 low.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What's the first thing advisers should do when they get home from a conference?

After attending a financial services conference, advisers can be overwhelmed by options, choices and tools. What's the first thing they should do when they get back to their office?

Latest news & opinion

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

Galvin's DOL fiduciary rule enforcement triggers industry plea for court decision

Plaintiffs warned the Fifth Circuit that Massachusetts' move against Scottrade signaled that the partially implemented regulation can raise costs for financial firms.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print