Thomas McDonnell, the long-time chief executive of beleaguered financial services software company DST Systems, is retiring from the company at the end of this year.
McDonnell was replaced immediately by Stephen Hooley, the company’s current president and chief operating officer. McDonnell will serve as non]executive chairman until the end of the year.
The Kansas City, Mo.-based company’s core business of offering recordkeeping services to mutual fund companies had faltered as it began to lose business to brokerage firms that could do the work directly. In recent years, DST began a series of acquisition to expand its information processing operations into the healthcare industry.
Not surprisingly, the stock was hit hard by the financial crisis, losing 70% of its value by March 2009, before struggling to regain ground, although it still remains significantly below its pre-crisis highs. Several of the company’s board directors have also resigned in the last two years. The company also has come under pressure to improve performance from its largest shareholder, California real estate tycoon George Argyros, who owns a 20% stake and is a board member.
Additionally, Russell Glass, founder of the investment company RDG Capital and former president of Icahn Associates Corp., made a public attempt to buy DST in June 2011, but was turned down by the board, which hireed investment bank Bank of America Merrill Lynch to evaluate options.
Hooley has been DST's President and Chief Operating Officer since 2009, after serving as CEO and President of Boston Financial Data Services, a joint-venture between DST and State Street Corp. Hooley was named to the DST Board last month.
“I have worked closely with the Board to plan for the right management succession at DST, and I am confident that Steve Hooley is the best person to lead DST through its next phase of growth and development,” said McDonnell.