Janus Capital Group Inc. said on Tuesday that Chief Executive Mark Whiston would step down, ending months of speculation about his tenure at the company while it was under investigation for improper trading.
Steve Scheid, a former executive of The Charles Schwab Corp. who was named chairman of Janus's board in January, will succeed Whiston as CEO, Denver-based Janus said
Under the terms of a consulting and separation agreement, Whiston will receive a cash payment of about $5.8 million, which includes a consulting services fee. In addition, the company will establish a $7.9 million deferred compensation retirement arrangement valued in Janus mutual fund shares.
Questions have persisted about Whiston, who was supposed to take over the chairman's position on Jan. 1, ever since Janus was named in the first complaint about abusive trade last year.
Speculation heightened in March when Janus said that in November 2002 it took steps to deter market timing, fast in and out trade that has been at the center of a scandal rocking the mutual fund industry.
Analysts have questioned whether Whiston was aware of market timing at Janus before New York Attorney General Eliot Spitzer launched his probe into improper trade in September.
To ensure a smooth transition and assist with client relations, Whiston will remain with Janus in a consulting capacity until year's end. The management change is effective Tuesday, the company said.
Janus said it anticipates that the payments and benefits to be provided in connection with Whiston's departure will result in a second-quarter charge of approximately $17 million, or 4 cents per diluted share. Of the total charge, $3.4 million represents the accelerated amortization of Whiston's unvested Janus common stock; that stock, which vests today, has a current value of approximately $2.1 million.