* Fetting to remain as a consultant till year-end
* Names Joseph Sullivan interim CEO
* Board forms a search committee to find a permanent
Sept 11 Money manager Legg Mason Inc said
Chief Executive Mark Fetting will resign effective Oct. 1 and
named Joseph Sullivan interim CEO, as the firm grapples with
Legg Mason reported its 19th straight quarter of outflows in
July and investors have been increasingly frustrated waiting for
Fetting to improve the performance of the firm's funds after
losses during the financial crisis.
Legg Mason's stock remains stuck at about one-quarter of its
price of around $100 in mid-2007 before the crisis hit. Shares
of rivals like BlackRock and T. Rowe Price Group
have already recouped all their losses and more.
For years, the company was best known as the home of star
stockpicker Bill Miller, whose fund outperformed the Standard &
Poor's 500 index 15 years in a row. But Miller's performance
tailed off starting in 2006 and led to outflows. Miller stepped
down from his best-known fund earlier this year.
The financial crisis also blew up a bet that Legg Mason
founder and prior CEO Raymond "Chip" Mason made in 2005 when he
swapped its brokerage unit for Citigroup's asset-management
Mason retired at the start of 2008 and was replaced by
Fetting. Fetting has spent much of his tenure trying to restore
the company's competitiveness through layoffs and cost-cutting
efforts, and new products, such as exchange traded funds.
Fetting had conceded that despite his turnaround efforts,
the company was still not delivering on all fronts and faced
Legg Mason's board cut Fetting's compensation by 17 percent
to $4.94 million, in its latest fiscal year, to reflect lagging
stock price and lackluster returns.
Legg Mason said that while Fetting had decided to resign, he
would remain as a consultant until the end of the year.
Baltimore-based Legg Mason's shares closed at $25.47 on the
New York Stock Exchange on Monday.