E-Trade Financial Corp. said R. Jarrett Lilien, passed over last month for chief executive, will leave the online brokerage.
The company, informed of his pending departure late Tuesday, said he will leave effective May 16, after E-Trade's annual meeting. Lilien, 46 years old, is E-Trade's president and chief operating officer. Donald Layton, E-Trade's new CEO, doesn't plan to fill the positions.
"The past nine years at E-Trade have been an incredible professional experience," said Lilien in a statement. "I am confident that E-Trade has the right plan in place, and the right management team, to execute this plan to return the company to its proper place of financial strength and strong growth."
Lilien's departure will mark the end of an era at E-Trade, which has suffered over the past year because of big bets on the mortgage market that went bad. Lilien was second in command at E-Trade when many of its mortgage investments were made. Mitch Caplan, his former boss, stepped down in November in the wake of big losses at the firm.
The departure will be a big test for Layton, who has been chief executive for only a few weeks. He spent most of his career at JPMorgan Chase & Co., but doesn't have any experience running an online brokerage firm.
E-Trade's discount brokerage operation is essentially strong, but the firm's stock has been weighed down by its exposure to the mortgage market, notably a $12 billion home equity portfolio.
Layton's first priority likely will be to restore some shareholder value.
Shares rose to $3.65 in premarket trading after closing at $3.61 Tuesday.
