E*Trade Financial Corp., which has been looking for a new chief executive since September, finally found its man.
The online brokerage firm, based in New York, announced Monday that former Citigroup Inc. executive Steven Freiberg will take over, starting April 1. "I am raring to go for the opportunity to get back into the industry and into a progressive company," he said in an interview.
Freiberg, 53 years old, has deep experience pitching financial products to consumers. He worked at Citigroup for 30 years, where his duties included overseeing the global consumer group. The unit includes investment products, retail and commercial banking, credit cards, mortgages and consumer finance. Freiberg left last year, shortly after being put in charge of a group holding assets and businesses that Citigroup was looking to get rid of.
Freiberg signed a four-year contract that provides an annual base salary of $1 million and a minimum of $3.25 million for his work in 2010, when including a guaranteed pro rated bonus. In addition, the new CEO will qualify for certain stock grants, with the first award to be made in 2011 and having a guaranteed value of $3 million at the time of the grant.
In the interview, Freiberg said his top priorities at E*Trade include ensuring an orderly transition and discussing the company's direction and operations with employees. Speculation has swirled that E*Trade, still trying to recover from losing bets on the U.S. mortgage market, will sell itself.
Freiberg said that a sale of the company is "one way to enhance value," but his primary goal is to bolster E*Trade's business.
E*Trade has been hunting for a new leader since the company announced last September that Donald Layton would leave when his contract expired at year end. Layton took over as CEO in 2007, after hedge-fund firm Citadel Investment Group injected most of a $1.75 billion capital infusion into E*Trade.
Freiberg will take over from interim Chief Executive Robert Druskin, an E*Trade director and former Citigroup executive who agreed to run the company until a successor was found. Mr. Druskin will remain on the board as non-executive chairman.
Since being burned by its strategy to buy up mortgages and other mortgage related-instruments, E*Trade has refocused on its core business of online trading, sold assets and raised capital.
Still, E*Trade shares are stuck in the basement. On Friday, they closed Friday at $1.57 in Nasdaq trading, a far cry from their level of more than $50 in 2000.
