(Bloomberg) -- Just months ago, LPL Financial Holdings Inc.’s board lavished praise on Chief Executive Officer Dan Arnold’s stewardship while boosting his bonus. On Tuesday, it fired him for breaking the firm’s pledge to maintain a respectful workplace, deeming him ineligible for severance.
An outside law firm investigated Arnold’s behavior and found he had “made statements to employees that violated LPL’s Code of Conduct,” the wealth-management company said, installing an interim leader effective immediately. It didn’t elaborate on what Arnold had allegedly said.
“LPL’s Code of Conduct requires every employee, no matter their title, to foster a supportive and professional workplace and show respect to each other, our stakeholders and the broader community,” Chair James Putnam said in the statement. “Mr. Arnold failed to meet these obligations.”
It was an abrupt tumble for a CEO who oversaw a sixfold jump in LPL’s stock price since taking over at the start of 2017 and who raked in almost $17 million in compensation awards last year — including a higher-than-targeted bonus. In a proxy sent to shareholders in March, the board lauded his work toward realizing LPL’s “strategic vision and cultural evolution.”
He won’t be entitled to severance benefits because he was terminated for cause, according to a separate filing Tuesday. His outstanding equity awards, both vested or unvested, are also subject to automatic forfeiture, the San Diego-based firm said in the filing.
Arnold didn’t respond to a request for comment. An LPL representative declined to comment further.
The board named Chief Growth Officer Rich Steinmeier to serve as interim CEO. Steinmeier, 50, has been chief growth officer since May, and before that he was a divisional president for the firm’s business strategy and growth. His compensation won’t change in connection with his new role, according to the filing.
“The board has every confidence in Rich and LPL’s seasoned management team to ensure a smooth and stable transition,” Putnam said.
An LPL veteran, Arnold joined the company in 2007, served as finance chief and later president before rising to CEO in January 2017. His total compensation awards jumped 23% last year, with the lion’s share in stock incentives, according to company filings.
The company serves more than 23,000 financial advisers, including advisers at around 1,000 institutions and at about 580 registered investment-adviser firms across the US, according to the firm.
--With assistance from Jeremy Hill.
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