By hiring Steven Freilberg as its chief executive officer after an exhaustive six month search, E-Trade Financial Corp. has sent a strong message to the industry: We aren’t for sale.
Freilberg, 53, was hired by the New York online brokerage company after working for more than 30 years at Citigroup Inc. [C] During that time, he managed its global consumer group, which offered investment products, retail and commercial banking, credit cards, mortgages and consumer finance. He left Citigroup in January 2009 shortly after being put in charge of Citi Holdings, which held the business units Citi was trying to divest.
E-Trade [ETFC] has been looking for a new top executive since Donald Layton announced in September that would leave the company when his contract expired at the end of last year. Layton had served as CEO since 2007, after Citadel Investment Group injected most of a $1.75 billion capital infusion into E-Trade. Robert Druskin, a director for the company and a former Citi executive, had served as interim CEO since the end of last year while the company continued to search for a permanent CEO. Druskin will remain on the board as nonexecutive chairman.
According to analysts, Freilberg was not the top choice for the position. The company’s board had settled on a candidate in January, but that person withdrew last month.
Freilberg, who will start at E-Trade on April 1, will have a difficult task of reviving the company, which has not posted a quarterly profit since 2007.
Patrick O’Shaughnessy, a Chicago-based analyst for Raymond James & Associates, wrote in a note to clients Monday that the “news will put to rest the notion that delays in finding a new CEO signaled that E-Trade was attempting to sell itself."