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E*Trade downgrades CEO's pay

The online brokerage renegotiates the contract of CEO Chris Cotsakos after shareholders express outrage that he was raking in millions while the company racked up big losses.

E*Trade has renegotiated the contract of its CEO, after shareholders of the online brokerage expressed outrage that he was raking in millions while the company racked up big losses.

E*Trade announced Friday that it had agreed to a new two-year contract for Chris Cotsakos that eliminates his base salary, requires him to return $6 million previously contributed on his behalf to an executive retirement plan and "significantly" reduces the amount of his prospective severance pay, although the company did not spell out what the new plan would be. Under the old plan, he would have received at least $125 million if the company were sold and if he were fired.

Cotsakos will also return 2 million restricted stock grants to the company.

In 2001, Cotsakos pulled in $4.9 million in salary and bonus, according to documents filed with the Securities and Exchange Commission. E*Trade also forgave a $15 million loan to Cotsakos last year, gave him $15.2 million to pay the taxes related to forgiving of that loan, paid him $29 million worth of restricted stock, and contributed more than $9 million toward a supplemental retirement plan.

In that same year, E*Trade posted a loss of $241.5 million, or 73 cents per share.

"I have listened to shareowner concerns and want to dispel any doubt that my commitment to the success of this company is unwavering," Cotsakos said in a release. "I am eager to eliminate the distraction of the compensation discussion so that we can focus on the business of E*Trade."

The new deal comes some two weeks before the company's shareholder meeting, where Cotsakos is up for re-election as chairman of the board.

Cotsakos still received some good perks from the company. In earlier years he received $15,685 toward a company car, and $108,625 for personal tax and financial planning services.