The departure of Chief Executive Officer Mark Fetting from embattled money manager Legg Mason has the firm reshuffling its top management in the face of a looming face-off with hedge fund manager Nelson Peltz of Trian Fund Management.
Fetting will step down Oct. 1, roughly two months before a standstill agreement with Peltz expires. That agreement bans Peltz, who secured a seat on Legg Mason’s board in 2009, from forming any partnerships or agreements to amass a larger voting block or force a sale or merger of any Legg Mason affiliates. That agreement ends Nov. 30. Trian holds a 10.5% stake in Legg Mason, and is the firm’s largest shareholder.
He was named chief executive in 2008, replacing firm founder Raymond “Chip” Mason, who retired. Since taking over the helm of Baltimore-based Legg Mason at the onset of the financial crisis, Fetting has steered the firm through some very choppy waters. Legg Mason reported its 19th consecutive quarter of outflows in July as investors remain frustrated with the performance of some of its funds; its stock is down about 70% from its highs before the financial crisis; and it reported its first quarterly loss in more than three year for the quarter ended June 30 due to debt restructuring expenses.
In turn, the firm named Joseph Sullivan, Head of Global Distribution, as Interim Chief Executive Officer while the Board conducts a search for a permanent CEO. Terence Johnson, who is currently head of International Distribution, will take on the additional role of Interim Head of Global Distribution.
Sullivan has been Head of Global Distribution at Legg Mason since December 2010 and was previously Head of Fixed Income Capital Markets at Stifel Nicolaus; and Johnson joined Legg Mason in December 2005 when it acquired Citigroup Asset Management, where he was Citigroup’s Head of International Private Asset Management.
Legg Mason held $636 billion in assets under management as of July 31.