Calamos Investments patriarch gives up CEO title

John Calamos Sr. will relinquish the CEO title next month after struggling for two years to reverse a decline in the company's business and stock price

Mar 18, 2016 @ 10:16 am

By Crain's Chicago Business

Longtime Calamos Investments leader John Calamos Sr. will relinquish the CEO title next month after struggling for two years to reverse a decline in the company's business and stock price.

Mr. Calamos, 75, will be replaced on April 4 by New York banker John Koudounis, 50, who last week confirmed that he would leave his post as CEO of Mizuho Securities USA immediately. Calamos Investments announced its executive change in a statement Monday.

Mr. Koudounis will earn an annual salary of $800,000, plus an annual bonus of $2.6 million, or more, depending on a determination by the board's compensation committee, the company said in a filing with the Securities and Exchange Commission today. In addition, he will get annual “long term incentive awards” of $1.6 million. A one-time sign-on payment of $1.25 million will be payable next year.

Mr. Calamos has led the company since founding it almost 40 years ago in 1977, and he will continue to serve as chairman of the board. “This is about deepening the bench,” said Jeff Kelley, senior vice president of marketing, who added that Calamos will be “as involved as ever.” Mr. Calamos will also remain as the company's global chief investment officer. His son, John Calamos Jr., is a senior vice president at the firm.

The patriarch was unable to stem the outflow of assets in the company's mutual funds and other investment products over the past few years, and profitability also suffered as fees earned on those assets declined. "While I will continue to be active in the business, John Koudounis' appointment as CEO will allow me to spend more time on my investment responsibilities as global CIO," Mr. Calamos said in the statement.

The company had $21.9 billion under management at the end of last year, down from $26.5 billion at the end of 2013.

Meanwhile, net income fell every year for the past five years, dropping to $21.4 million last year, or about a third of the $70.8 million it earned in 2014, and down from $137.9 million in 2011. Revenue fell 8% last year to $230.9 million, also declining for the fifth year in a row.

Calamos has suffered alongside public shareholders because a family affiliate owns 78% of the company, with just 22% of the economic interest traded publicly on the Nasdaq Stock Market.

Efforts to revamp the management team have made little difference. In 2013, Co-Chief Investment Officer Nick Calamos, a nephew of the founder, exited and was replaced by former Janus Capital CEO Gary Black, but he didn't last long. Mr. Black left the firm last fall.

Earlier this year, Mr. Koudounis, a Chicago native, seemed eager to keep driving growth at Mizuho, a subsidiary of Japan's second-largest bank, Mizuho Financial Group, telling Forbes “we want to be the new face of Wall Street” in January. He will work from Chicago now, rejoining his family that continued to live here while he commuted to New York, Mr. Kelley said.

He will lead Calamos Investment's business activities, including its growth strategy, while Mr. Calamos Sr. continues to oversee investment responsibilities, the statement said. Both of the men are Greek-Americans and have worked together on philanthropic activities, including as board trustees at the National Hellenic Museum in Chicago.

Neither Calamos nor Mr. Koudounis was available for interviews.

By Lynne Marek


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