CIT Group plans to increase the size of its board as part of a $29 billion dollar debt exchange, reports Bloomberg. The company may be preparing to remove CEO Jeffrey Peek. The firm hired Spencer Stuart to help hire 3 additional board members, bringing the company’s 10-member board to 13. “New people with new perspectives can change the balance of power” and cost Peek his position, said Claudia Allen, chair of Neal Gerber & Eisenberg LLP’s corporate governance practice group in Chicago. “In many of these troubled financial institutions we have seen board shakeups.” The board extended Peek’s employment contract last month, keeping him at the helm until at least Sept. 2, 2010, according to a Sept. 4 filing. Peek earned $800,000 in base salary last year, and stock and option awards helped bring his total compensation to $5.4 million. “The lenders are seeking greater control over company management to protect their investment,” said Charles Elson, chairman of the University of Delaware’s corporate-governance center in Newark, Delaware. “It is the lender exercising greater control over the company.”
CIT Hires Spencer Stuart, CEO Peek May Leave
CIT Group has hired Spencer Stuart to help add additional members to its board, CEO Jeffrey Peek may be leaving the company.
October 5, 2009