Legg Mason cuts 12% of staff in revamp as investor Peltz joins board

Legg Mason cuts 12% of staff in revamp as investor Peltz joins board
Most of the 120 employees being let go are in the United States.
MAY 24, 2019

Legg Mason Inc. is cutting 120 people, or about 12% of its staff, and streamlining its executive committee just days after adding investor Nelson Peltz to its board. The cost-cutting steps are "critical to our ongoing growth," Joseph Sullivan, chief executive of the Baltimore-based asset manager, said in a memo to staff Thursday. Asset managers have taken aim at their employee ranks as they face unprecedented pressure on fees and substantial investments in technology. In recent months, BlackRock Inc., State Street Corp. and AQR Capital Management have announced staff reductions. In February, Legg Mason had announced reorganization plans, including unspecified job cuts. (More: Legg Mason to close a quarter of its ETFs)​ At Legg Mason, almost 100 of the cuts will be staff in the U.S., according to Mary Athridge, a company spokeswoman. The rest will come from offices in Europe and Asia. The executive committee reporting to Mr. Sullivan will be consolidated from eight to four members: Terry Johnson, who will oversee marketing and distribution; Patty Lattin, head of human resources and facilities; Tom Merchant, general counsel and head of risk management; and Pete Nachtwey, chief financial officer. Departing executives include Fran Cashman, Tom Hoops, John Kenney and Ursula Schliessler. Mr. Peltz and two other representatives of his Trian Fund Management will join Legg Mason's board after the $10 billion New York-based hedge fund acquired a 4.5% stake, the company announced Tuesday. Mr. Peltz said then that he had three top priorities: "significantly reducing costs, driving revenue growth organically and through acquisition, and increasing profitability." The investor previously served on Legg Mason's board from 2009 to 2014, when Mr. Sullivan was named as CEO and the firm went on an acquisition spree. Legg Mason is also adding two more independent board members as it expands the number of directors to 12 from 10. (More: Are the economics of active management becoming unsustainable?)

Latest News

Financial advisors are wealthier than ever, but are they happier?
Financial advisors are wealthier than ever, but are they happier?

To achieve contentment, advisors should think twice before selling their firms for the biggest dollar amount.

Cetera lands $2.1 billion LPL OSJ in latest West Coast move
Cetera lands $2.1 billion LPL OSJ in latest West Coast move

San Diego broker-dealer giant picks up California-based Sierra Ridge and its roughly 40 advisors, who had been affiliated with LPL for just over a year.

The great wealth transfer is really a trust transfer, not a check
The great wealth transfer is really a trust transfer, not a check

Advisors chase asset transfer, but the next generation decides whether the relationship survives it too

Global finance leaders warned that AI poses systemic risk to markets
Global finance leaders warned that AI poses systemic risk to markets

FSB, FINRA and Canada's OSFI have each flagged AI as a threat to financial stability, citing stretched valuations, rising retail leverage and cyber vulnerabilities

Most Americans want retail investors to share in AI gains
Most Americans want retail investors to share in AI gains

New research finds 67% of US adults support broader access to AI investment opportunities, amid inequality concerns.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income