E*Trade Financial has ousted its CEO, Citigroupveteran Steven Freiberg, just two years into a four-year contract as the online broker deals with declining trading by customers.
The company said Thursday that it's looking for a new chief executive as it adjusts its business strategy, which is focused on strengthening its financial position. It named its chairman to the top spot until a permanent replacement can be found.
E*Trade has been struggling as individual consumers pull money out of the stock market. The New York company's net income dropped 16 percent in the April to June quarter as investors made far fewer trades than a year ago. Faced with less trading activity, E*Trade said it was focusing on managing costs and dialing back on risk to strengthen earnings.
Freiberg, 55, had been at E*Trade's helm for a little more than two years. He was at Citigroup for 30 years before that, where he most recently led the consumer group that handles individual investments, retail banking, and credit cards.
Freiberg was paid a base salary of $1 million a year and was eligible for stock incentives worth up to three times that. He will get an undisclosed severance package.
Shares of E-Trade have lost more than half their value in the past year. Adjusting for a stock split, they are down 97 percent from their peak in 2006. The stock was up more than six percent in pre-market trading Thursday.
Frank Petrilli, 61, has been E*Trade's chairman since January. He's a long-time financial industry executive.