Whiston, 42, will be succeeded as CEO by Steve Scheid, who will continue to serve as chairman of the company’s board. The management change is effective today, Janus’ board of directors said in a news release.To ensure a smooth transition and assist with client relations, Whiston will remain with Janus in a consulting capacity until year’s end.
Scheid, 50, a former executive of The Charles Schwab Corporation, joined the Janus board as an independent director in December 2002. On January 1, 2004, he was appointed chairman of the board.
Whiston’s departure will not come cheaply. Janus said it expects payments and benefits related to Whiston will result in a second-quarter charge of about $17 million, $3.4 million of which represents the accelerated amortization of Whiston’s unvested Janus common stock. The remain portion of the payout is comprised of approximately $5.8 million, which includes a consulting services fee to ensure the smooth transition and the establishment of a $7.9 million deferred compensation retirement arrangement valued in Janus mutual fund shares.
News of Whiston’s exit will finally put to bed the rampant speculation about his job which have been thrown around since Janus did not name Whiston to its Chairman position on January 1. Whiston’s position was made even more tenuous following reports in March that said Janus and New York Attorney Elliot Spitzer were close to a settlement in the ongoing mutual fund trading scandal investigation. The rumored settlement included a requirement that Whiston resign because an internal Janus memo showed that he and other senior managers knew about the trades in November 2002, well ahead of the current market timing and late trading investigation that began in September 2003 (See Report: Whiston Aware of Market Timing Before Current Investigation ).
Janus, one of the first mutual fund firms named in the expanding fund trading scandal, divulged 12 arrangements that allowed for market timing across its domestic mutual fund business in a U.S. Securities and Exchange Commission (SEC) filing last November following an internal review. The firm’s alleged involvement in these market timing arrangement and the subsequent disclosure was followed by executive vice president, Lars Soderberg taking a leave of absence, while the firm assesses his role.