AllianceBernstein (AB) caught market participants by surprise on Monday announcing it has replaced its CEO and chairman as well as nine independent board members in one fell swoop.
Previous CEO, Peter Kraus, who had been appointed by majority stakeholder Axa in 2008, was terminated from the position Friday, April 28, according to an SEC filing.
The board has appointed Seth Bernstein to succeed Kraus effective May 1 and given him a seat on the company's board. The new chief executive was previously at JP Morgan Asset Management, where he was the global head of managed solutions and strategy.
Bernstein had been with JP Morgan Chase & Co for over 30 years and in his previous role was responsible for the management of all discretionary assets within the private banking client segment.
As well as his CEO role, Kraus was also chairman of the board of directors, a position that has now been taken over by Robert B. Zoellick, a former president of the World Bank between 2007 and 2012. Since his retirement from the World Bank, Zoellick has been a senior fellow at the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government.
Zoellick also served as vice chairman, international of Goldman Sachs and chairman of Goldman Sachs' board of international advisors from 2006 to 2007.
Commenting on Kraus’s exit, the chairman of Axa’s board of directors, Denis Duverne, said: [Peter Kraus] has built a strong team and we believe the company is well positioned for an excellent future. We wish him well.
‘Looking forward, continued success requires us to keep partnering closely with our clients to create the right solutions for their needs through constant innovation. In an industry that is confronting significant shifts, we need to continue transforming the business to improve the quality of our investment solutions while delivering our services more effectively.
‘We are confident that with Bob and Seth we have the right leadership team in place to capitalize on new opportunities and deliver superior value to all of our stakeholders.’
The board also chose to remove nine directors and elected six new board members including Bernstein, Zoellick and Anders Malmstrom, the chief financial officer of AXA Financial.
AB announced that it has appointed three new independent directors to a newly reconstituted board: Barbara Fallon-Walsh, Daniel G. Kaye and Ramon de Oliveira.
Fallon-Walsh held several executive positions at Vanguard between 1995 and her retirement in 2012.
Kaye retired from Ernst & Young in 2012 after a 35-year career and served as interim chief financial officer and treasurer of HealthEast Care System from January 2013 to May 2014.
Ramon de Oliveira is the managing director of the consulting firm Investment Audit Practice.
Current directors Duverne and Mark Pearson, CEO of Axa Financial, will remain on the board.