GLOBAL – State Street Global Advisors may have to pay out more than $5m (€4m) to its former chief investment officer - and current Schroders CIO - Alan Brown over a lost benefits claim.
Brown, who was also vice chairman of SSGA and executive vice president of State Street bank, has accused his former employer of reneging on an agreement regarding a “generous” redundancy package.
According to a Financial News report, former State Street chief executive David Spina was concerned in 2003 about the number of executives who took these packages.
Spina allegedly persuaded Brown and a colleague to stay, promising that they could take the package at any time over the next five years. This promise was allegedly reinforced by Spina’s successor Ron Logue in 2004 and by human resources senior vice-president Luis de Ocejo.
Brown decided to take his extended package – pegged at over $5m by the human resources department – in March 2005 after being passed over for the position of chief executive of the division in favour of State Street client relationship manager William Hunt.
However, according to Brown’s court filings from the US District Court of Massachusetts, “In response to this notification, State Street terminated Brown’s employment and denied that he was entitled to voluntary severance package benefits.”
While State Street has denied Brown’s claims and asked for a dismissal, it is understood that he will press ahead with his claim, said the report. He has requested a jury trial and the case could be heard later this year.
A State Street spokesperson told IPE: “Unfortunately, we are not able to comment.”
IPE reported in May 2005 that Brown was to replace Richard Horlick as CIO of Schroders. Brown is a member of Schroders’ group management committee, and reports to chief executive Michael Dobson.