Sullivan, a Legg insider who was named CEO and president in February, had been serving as interim chief executive after Mark R. Fetting stepped down in October. The Baltimore-based money manager in recent years has suffered from poor performance among some of its mutual funds as well as an outflow of investor dollars.
The executive team will focus on supporting Legg's affiliates and expanding investment offerings, including through acquisitions, Sullivan said.
But Legg will do so without some of its top players.
Ronald R. Dewhurst, the only other internal candidate for the CEO post and the former head of global investment managers, left the company as of March 31, Legg said. Thomas P. Lemke, general counsel and head of governance, also exited to "pursue new opportunities," the company said.
Their severance packages will cost Legg a total of about $8.5 million. The packages include a lump sum of $3.31 million for Dewhurst and $2.1 million for Lemke, as well as restricted stock and stock options for both.
Legg's executive team now includes Pete Nachtwey as chief financial officer, a position he has held since 2011; Terry Johnson, head of the company's global distribution; Thomas Merchant, general counsel; and Jennifer Murphy, chief administrative officer.
Murphy was most recently president and CEO of Legg Mason Capital Management, the Baltimore-based subsidiary that became nationally known under its star manager
Legg said it will be hiring an executive to broaden the company's investment offerings.
Michael S. Kim, an analyst with Sandler O'Neill & Partners in New York, said such a reshuffling of executives is expected with Sullivan's ascension to CEO.
Still, Kim said, the changes reinforce the message that "the status quo is not an option going forward in terms of thinking about the direction of the firm."
Legg's stock closed Tuesday at $31.65 per share, up 9 cents.