State Street names Hooley president, likely heir apparent

Jay Hooley will continue to run a separate unit.

State Street Corp. named Jay Hooley as president and chief operating officer, elevating an insider to become second in command and heir apparent of the Boston financial services giant.

Hooley, 51, will take both titles from Ronald Logue, who remains the company's chairman and chief executive. The move would also make Hooley a likely successor, though a spokeswoman said Logue, 62, has no plans to retire anytime soon.

The change is the latest personnel shift at State Street, which like other financial firms has been buffeted by the credit crunch. In April it named an outsider, Scott Powers, to lead its fast-growing Global Advisors investment unit, after its previous chief stepped down amid growing problems with investments tied to subprime mortgages.

Hooley will keep his position running a separate unit that oversees State Street's more traditional lines of business, providing services to other investment companies such as mutual funds. In recent years he also has already taken on many of the responsibilities he will keep as president, a spokeswoman said, such as overseeing the company's information technology group and its investment research and trading operations.

Neither Hooley nor Logue were available to comment. State Street disclosed the promotion yesterday afternoon, after holding its annual meeting in the morning at its downtown skyscraper.

At the meeting, Logue did not directly address some of the concerns stemming from the credit crisis that have held back the company's share price this year. Shares closed at $72.14 yesterday, down 62 cents and off highs of the mid-80s reached earlier this year. Among other things, investors have been concerned with potential losses in four State Street investment vehicles that hold assets such as mortgages and student loans.

Logue said the company is on track to reach its long-term goals, such as increasing Global Advisors' share of company revenues, and the share it generates from foreign operations to 50 percent, up from 41 percent last year and 24 percent in 2002. He also said the company's integration of cross-town rival Investors Financial Services Corp. is proceeding smoothly following the $4.5 billion purchase last year.

State Street has kept 29 of Investors Financial's top 30 customers, Logue said, retaining 91 percent of its revenue. So far it has eliminated $170 million in annual costs, about halfway to its target of cutting up to $365 million.

"Consistency, consistency, consistency, that's where the market will reward us," he said. He also noted the company's increased attention to controls, such as naming a new chief risk officer earlier this month, Maureen Miskovic.

Two shareholder proposals failed to pass at the meeting, including one that would have given investors the opportunity to vote on compensation of top executives. State Street said formal voting results for that measure won't be disclosed until its next quarterly earnings release in June.

The company said another measure that would have changed its bylaws to prohibit hiring its audit firm for other corporate work was defeated with 90 percent of the shares voted voting against the proposal.

Ross Kerber can be reached at kerber@globe.com.