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PGIM Files Lawsuit Against Prudential Financial Over CEO Hiring

PGIM’s Argument

PGIM, the investment management subsidiary of Prudential Financial, has filed a lawsuit against its parent company over the hiring of its new CEO, Charles Lowrey. PGIM alleges that Prudential breached its fiduciary duty by hiring Lowrey from Morgan Stanley Investment Management Inc. without conducting a proper search for other candidates.

Background of the Dispute

Lowrey was hired as Prudential's CEO in March 2023. Prior to that, he served as the CEO of Morgan Stanley Investment Management Inc. PGIM claims that Prudential did not conduct a thorough search for other candidates before hiring Lowrey and that the company failed to consider internal candidates who were qualified for the role. PGIM also alleges that Prudential did not disclose the terms of Lowrey's employment contract to the board of directors before he was hired.

Rebuttal from Prudential

Prudential has denied PGIM's allegations and stated that the company conducted a thorough search for a new CEO. Prudential also said that the board of directors was fully informed of the terms of Lowrey's employment contract before he was hired.

Key Points of the Case

* PGIM alleges that Prudential breached its fiduciary duty by hiring Lowrey without conducting a proper search for other candidates. * Prudential denies these allegations and states that the company conducted a thorough search. * The lawsuit is ongoing, and it is unclear how it will be resolved.

Impact of the Lawsuit

The lawsuit is likely to have a significant impact on both PGIM and Prudential. If PGIM is successful in its lawsuit, it could force Prudential to reconsider its hiring decision and potentially even remove Lowrey as CEO. The lawsuit could also damage Prudential's reputation and make it more difficult for the company to attract and retain top talent.

Conclusion

The lawsuit between PGIM and Prudential is a reminder of the importance of conducting a thorough search for a new CEO. Companies that fail to do so may find themselves facing legal challenges and reputational damage.