Glenn S. Schafer, 62, a director since December 2007, will replace Scheid, 58, as chairman, the company said today in a statement. Janus rose 5.4 percent to close at $7.99 in New York trading, the most since Dec. 29, after Scheid announced his departure and the company reported fourth-quarter earnings of 19 cents a share, 3 cents more than the average estimate of eight analysts in a Bloomberg survey.

Scheid’s eight-year chairmanship was marked by a clash with fund managers over the leadership of the company, the departure of at least 15 fund managers and senior executives, a drop in assets under management and a decline in Janus’s shares by more than half. He also passed on takeover attempts by larger rivals.

“I wouldn’t rule out” renewed takeover interest in Janus, Michael Kim, an analyst at Sandler O’Neil & Co. in New York, said in a telephone interview. “That’s why the stock was up 8- plus percent, but given where they are in the cycle, I’m not sure that it makes sense right now to look at partnering with a bigger firm.”

Black Quits

The company conducted talks with Franklin Resources Inc. (BEN), the San Mateo, California-based money manager, and Massachusetts Mutual Life Insurance Co. in 2009 over their possible purchase of Janus, said two people familiar with the matter, who asked not to be identified because the talks were private.

Scheid and CEO Gary Black split over whether to accept an offer, according to a Reuters report at the time, and Black quit on July 13, 2009. Rona Gilbert, a spokeswoman for Janus, declined to comment.

Black was replaced in February 2010 by Richard M. Weil, an executive at Pacific Investment Management Co. in Newport Beach, California. Weil said during a conference call today with analysts that Scheid’s departure didn’t indicate any change in direction for the firm.

“Personally I don’t think this guy wants to come in and sell this company right away,” Daniel Fannon, an analyst in the San Francisco office of Jefferies & Co., said in a telephone interview. “He wants the chance to turn it around.”

Weil has worked to diversify Janus’s offerings, improve sales and cut costs.

Janus Net Income

Janus, which has about 90 percent of client assets invested in stocks and focuses on actively managed funds, has struggled to stop client withdrawals as investors flee equities and turn increasingly to indexed products.

Janus today said fourth-quarter net income fell 46 percent to $35.7 million from a year earlier as customers pulled out $4 billion in the three months ended Dec. 31, marking the 10th consecutive quarter of redemptions.

Assets under management were $148.2 billion as of Dec. 31, down 13 percent from a year earlier and up 5.1 percent in the fourth quarter as $11.2 billion in market appreciation offset the impact of investor redemptions.

Janus’s assets as of Dec. 31 were 2.2 percent lower than eight years earlier, just before Scheid became chairman. During the same period, the company’s shares fell 62 percent while Franklin and Baltimore’s T. Rowe Price Group Inc. (TROW) rose 85 percent and 140 percent, respectively.

Employee Lawsuit

Scheid feuded with top employees. When the firm was sued by former fund manager Ed Keely for alleged contract violations, Scheid testified during the May 2009 trial that portfolio managers had threatened to “smear Janus’s name in the marketplace” if Scheid didn’t fire Black. Janus lost the case and was ordered to pay $7.5 million in compensation and legal costs.

Keely was one of several top managers to depart. Others included David Corkins and Scott Schoelzel.

The departures have coincided with eroding fund performance. Of Janus’s largest 20 stock and balanced funds, representing $72.2 billion in assets, four beat their benchmark index in the year ended Jan. 24, compared with nine over a three-year period and 15 over the past five years, according to data compiled by Bloomberg.

Schafer, a former vice chairman at Pacific Life Insurance Co. in Newport Beach, California, will take over April 27. He has been a director at Janus since December 2007.

Janus has risen 27 percent this year, compared with the 5.9 percent increase for the 20-company Standard & Poor’s index of asset managers and custody banks.

Janus runs the Janus, Intech and Perkins funds.

To contact the reporter on this story: Christopher Condon in Boston atccondon4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel atcbaumgaertel@bloomberg.net

http://www.bloomberg.com/news/2012-01-26/janus-rises-most-in-five-months-as-scheid-quits-earnings-beat-estimates.html

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