AllianceBernstein Holding LP, the money manager that oversees about $498 billion, ousted Chief Executive Officer Peter Kraus and more than half of the board in a shake-up.
JPMorgan Chase & Co.'s Seth Bernstein will take over as CEO and Robert Zoellick, a former World Bank president and Goldman Sachs Group Inc. executive, as chairman, the company said Monday in a statement. Kraus had held both positions and stands to get at least $99.3 million as part of an exit agreement.
Pressed by analysts to explain the sudden management revamp, Denis Duverne, chairman of AXA SA, the French insurer that's the parent of AllianceBernstein, provided few details. "We decided it was time to put new leadership in place," he said on a conference call. "We are not here to challenge what has been done in the past. We are here to discuss the future."
Kraus became CEO in December 2008 and in his first few years watched as investors pulled billions from the money manager. Assets at the firm peaked at more than $800 billion in 2007. Kraus, 64, eventually stopped the bleeding and stabilized assets. But most of AllianceBernstein's business is active management at a time when investors are fleeing stock picking for firms offering passive, index-based funds.
"You have to wonder if there was a specific problem or if they just thought he was the wrong guy for a changing industry," said Lawrence Glazer, managing partner at Mayflower Advisors in Boston where he helps oversee $2.5 billion.
AllianceBernstein has agreed to purchase 4.34 million stock units beneficially owned by Kraus at a price of $22.90 per unit, according to a regulatory filing. The first sale will occur on Sept. 1 and include units he owned as of April 28. The transaction doesn't include restricted units, which will be paid in the future.
Kraus wasn't immediately available for comment and AllianceBernstein officials didn't return a call.
Bernstein, 55, spent more than three decades at JPMorgan, most recently as managing director and global head of managed solutions and strategy at the bank's asset-management arm, according to the statement. He isn't related to Sanford Bernstein, the founder of a predecessor to AllianceBernstein, a company spokesman said by email.
