- E*Trade said on Wednesday that CEO Karl Roessner would
step down immediately and be replaced by COO Michael Pizzi —
making him the company’s third CEO in six years.
- TD Ameritrade said last month that Tim Hockey would be
out as CEO early next year, but named no immediate
- Business Insider spoke with Hockey earlier this month,
and he talked about the search for a new leader and guiding TD
Ameritrade in the meantime.
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Shakeups at two discount brokerage rivals in recent weeks have
caught many industry-watchers by surprise — with E*Trade’s chief
executive stepping down and TD Ameritrade announcing its current
CEO will be gone by early next year.
E*Trade said on Wednesday that Karl Roessner would immediately
be replaced by COO Michael Pizzi — making him the company’s third
CEO in six years. TD Ameritrade said last month that Tim Hockey
would be out as CEO early next year, but named no immediate
The pair of departures come as emerging digital entrants in the
retail stock-trading and wealth management space have ratcheted up
competition, and some discount brokers have consolidated — TD
Ameritrade acquired rival Scottrade in 2017. The industry is also
under pressure from a flatter yield curve and lower appetite for
trading from clients.
But unlike its competitor, E*Trade has avoided the “risk of a
holding pattern” during a CEO search, Brennan Hawken, an analyst
at UBS, wrote in a client note.
And Craig Siegenthaler, an analyst at Credit Suisse who rates
E*Trade’s stock positively, said Roessner’s departure did not raise
the probability that the company will be acquired or signal a
change in strategy.
“We believe this was Karl’s decision to leave, and was driven by
personal factors (and not by the firm’s decision not to sell last
year when its share price was higher),” he wrote in a Thursday
Roessner’s discussions with E*Trade about his desire to step
down began late last week, and the final decision took shape early
this week, a source familiar with the situation told Business
Insider. Roessner said in a statement on Wednesday that E*Trade
“could not be in a better place to achieve its next leg of growth”
under the new leadership.
Similarly, TD Ameritrade’s board said in a July 22
statement that the “best path forward” for the company’s growth
was Hockey’s departure, without publicly elaborating on that
Business Insider spoke with Hockey earlier this month, and he
addressed how he’s involved with the search process for a new
leader and guiding TD Ameritrade in the meantime.
“It’s still very early days,” Hockey told Business Insider,
adding that the search committee has already interviewed his
leadership team asking what they want in the next CEO and that the
company had decided on an executive search firm.
He described the conversation leaving up to the announcement of
his departure as ongoing, but said that the actual decision as
coming together quickly.
Hockey has agreed to stay in his role until next February as the
board of directors looks for a successor inside and outside of the
brokerage. If TD Ameritrade names a replacement before then, he
will move into an advisory role.
“It’s an interesting leadership challenge, because what I’m
trying to do is to keep the organization moving forward on the
strategy and getting prepared for the environment ahead,” Hockey
told Business Insider. Still, he said, “you don’t want to make too
many decisions for your successor.”
He added that he and his predecessor, Fred Tomczyk, still talk
after Tomczyk left his post four years ago.
“It’s helpful to have somebody to bounce ideas off,” Hockey
Even so, Hockey, who had been at TD Bank for 32 years before
moving over to TD Ameritrade, said it is good not to have too much
involvement at a firm once a successor is made clear.
“Having seen these happen before, too much of an overlap is not
good for anybody,” he told Business Insider.
He said TD Ameritrade’s approach gave it the “widest possible
candidate pool,” and that having an incumbent for the next chief
executive makes casting a wide net difficult.
E*Trade’s more abrupt transition has also spurred speculation
that Roessner could be headed to TD Ameritrade, according to one
analyst, though the same analyst said they personally viewed any
such link as unlikely.
“We do not believe he is leaving with another opportunity in
hand or in discussion (we have even received several questions
around a connection to Ameritrade’s CEO search, which we think is
unlikely),” JMP Securities analyst Devin Ryan told clients on
Wednesday in a note.
And as for what’s next for Hockey?
“At this stage, I will probably not take another CEO job,” he
told Business Insider.