Janus Capital Group Inc. must pay about $4.8 million to a former portfolio manager who alleged the investment company violated his contract by changing his compensation and giving a secret side deal to one of his colleagues, a Colorado jury ruled.
Jurors in state court in Denver deliberated seven hours over two days before finding that Janus breached Edward Keely’s contract by cutting his pay by as much as 65 percent. The panel also found Janus’ decision to give a star portfolio manager a separate deal after promising to treat all fund overseers equally also violated Keely’s agreement.
“I think it was the appropriate judgment,” Keely said after the verdict. “The evidence was irrefutable. Hopefully, the company will take pause and think twice before treating people this way in the future.”
The week-long trial cast a spotlight on Janus chief executive Gary Black’s move in 2004 to curtail the power of individual fund managers in favor of team-based investing and his alteration of compensation agreements.
Janus officials contended they didn’t violate Keely’s contract and paid him everything he was due when he left in 2007. Janus paid Keely $2.2 million in stock and stock-option grants as severance.
“We are disappointed with the outcome of the trial,” said Shelley Peterson, a Janus spokeswoman. “At the center of this suit was an attempt by Ed Keely to renegotiate his severance agreement retroactively through the court. We believe Janus fulfilled its obligations to Mr. Keely according to the severance agreement that he negotiated and agreed to in late January 2005.”
