CBOT feud prompts president to resign

Thomas Donovan resigned Friday as president of the Chicago Boardof Trade, ending a nearly two-decade run as the towering figure ofthe city's leading financial exchange.

Donovan, 62, stepped down because of ongoing battles with theCBOT's chairman, David Brennan. Since Brennan assumed office inJanuary 1999, the exchange has wrestled with many tough issues, suchas converting itself into a for-profit company and possibly mergingwith its La Salle Street kinsman, the Chicago Board Options Exchange.

Insiders said that with those matters looming over the CBOT,Donovan opted to leave now rather than when he had less leverage tonegotiate a contract buyout. His contract, which paid him a minimumof $1.4 million annually, was to have expired at the end of 2003.

CBOT directors accepted his resignation at an emergency meetingFriday. Exchange officials declined further comment, but sources saidthe directors approved a $10 million buyout package for Donovan.

Brennan and his supporters "wanted Donovan gone at any cost," saidBurt Gutterman, chief executive officer of Sangamon Trading Inc. "Ithink this may be a case of `Be careful what you wish for.' "

Some said the CBOT will suffer from losing Donovan's politicalskill. The president since 1982, Donovan was the patronage chief forformer Mayors Richard J. Daley and Michael Bilandic.

"The timing couldn't be worse," said Les Rosenthal, a former CBOTchairman. He said that because of infighting and businesschallenges, the CBOT "will have a difficult time getting anyone ofequal stature."

Members critical of Donovan said he was an obstructionist on the issue of reorganizing the CBOT. Brennan is pushing a plan to dividethe exchange into two for-profit companies, including one devoted toonline trading.

One trader said he was "pleased to see Donovan's resignation. He'sbeen very costly to the Board of Trade over time."

Meanwhile, sources said a possibly permanent successor, GeorgeSladoje, interviewed for the job Friday.

Sladoje was a Board of Trade executive from 1982 to 1993. He laterserved as chief financial officer of the Chicago Stock Exchange andis currently chief executive officer of the California PowerExchange.