H&R Block Inc, the largest U.S. tax preparer, said on Tuesday that Chairman and Chief Executive Mark Ernst had resigned, following mounting losses tied to subprime mortgages.
Richard Breeden, a former U.S. Securities and Exchange Commission chairman, was named chairman. Breeden, now an activist investor, joined H&R Block's board earlier this year after a proxy fight.
Alan Bennett, who retired this year as chief financial officer of health insurer Aetna Inc, was named interim chief executive. H&R Block said it had formed a search committee to find a permanent CEO as Bennett does not want to be considered for that job.
The company's shares rose 2.3 percent in trading before the market opened.
Ernst's resignation took effect immediately, although he will remain with H&R Block as a consultant. The Kansas City, Missouri-based company did not immediately return calls seeking further comment.
Breeden won three seats on H&R Block's board in September after pushing the company to refocus on tax preparation.
In the 15 months ended July 31, H&R Block lost $736.2 million, largely from losses in its Option One Mortgage Corp subprime lending unit.
H&R Block had agreed in April to sell Option One for an amount estimated at $1 billion to private equity firm Cerberus Capital Management LP. That agreement collapsed as the U.S. housing slump deepened. H&R Block has been trying to salvage a sale of at least part of Option One.
Shares of H&R Block rose 43 cents to $19.50 in premarket trading. They began the year at $23.04.
(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn)