Janus Capital Group
will skip handing out stock options to most executives this year, said CEO Mark Whiston
. The move is part of an effort by Whiston to keep costs in check in the face of declining assets under management and revenues at the fund firm. Quarterly profits at Janus fell by more than half to $38 million from $97 million last year.
The decline in year-over-year earnings marked the ninth consecutive quarter of such declines.
"Let me assure you that none of us is happy with our short-term performance," said Whiston. The dwindling bottom line is the result of the drop in assets invested with the Denver firm. During the first quarter, Janus funds shrank by another $5.7, including $2.7 billion of net redemptions and $3.0 billion of market losses.
Whiston hopes to diversify Janus' business by distributing third party funds. In one such deal, he said that Janus will distribute and rebrand two Vontobel funds -- U.S. Value and International Equity. Janus will also take over transfer agency duties on the funds and act as their advisor. Vontobel will stay on as the subadvisor. Those two funds currently hold just $140 million of assets. Janus is also seeking to build its distribution into the Asian market.
Meanwhile, Whiston is also closely watching the expense side of the ledger. Stock options were not the only thing cut, the firm also eliminated 60 jobs during the quarter. That figure is in addition to 140 jobs it cut at the end of 2002 when it completed its reorganization. That figure represents 4.1 percent of Janus' 1,355 member workforce. That figure includes 211 in sales and marketing and 356 in its transfer agency unit.
Whiston said that some key executives will receive a limited amount of grants as part of an effort to retain and attract top talent. He made his comments yesterday in a call with stock analysts following Janus' quarterly earnings release.
Janus has made headlines recently after a series of high-profile executive departures. The most recent was Helen Young Hayes.
"We are balancing the competitive reality of this business," Whiston told analysts. "Our compensation philosophy is to pay for performance that is competitive to benchmark and that increases stockholder value."
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