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E*Trade chief steps down

The online brokerage announces the resignation of Chris Cotsakos, who had been with the company since 1996 and had run into controversy last year over his compensation.

The chief executive and chairman of online brokerage E*Trade Group is stepping down, effective immediately, the company said Friday.

Chris Cotsakos, who has been with the company since 1996, will also give up his position on the board of directors. The company did not give a reason for his departure.

Mitchell Caplan, formerly the company's president and chief operating officer, will replace Cotsakos as CEO. George Hayter, a director of the company, will become nonexecutive chairman of the board.

On Wednesday, E*Trade reported a profit of $30 million for the fourth quarter, matching expectations. But it warned that in the first quarter, earnings from ongoing operations would fall 20 percent to 30 percent below analysts' estimates.

E*Trade, one of the best known of the online stock brokerages, flourished in the heyday of the Internet boom. As that business has contracted, the company has tried to expand beyond its online trading roots by offering banking, mortgage and insurance services.

Controversy attached itself to Cotsakos last summer when the company revealed that, on top of his $4.9 million in salary and bonuses, it had given him more than $91 million in compensation, including forgiving a $15 million loan and giving him $15.2 million to pay the taxes related to the loan.

Cotsakos later returned part of the compensation after the awards met with sharp criticism from investors.

"I am extremely proud of what we have accomplished over the past seven years, and it is with great confidence that I hand the success and momentum to Mitch Caplan to further build on the core strengths of E*Trade," Cotsakos said in a statement.