Target CEO resigns as fallout from data breach continues
Target’s massive data breach claimed its highest-profile victim yet — Chief Executive Gregg Steinhafel — as the retailer struggles to recover the trust of shoppers and investors.
After 35 years with the brand, Steinhafel stepped down Monday as Target Corp.’s CEO, president and chairman following “extensive discussions” with the Minneapolis company’s directors, the company’s board said in a statement.
“We are grateful to him for his tireless leadership,” the statement said.
Steinhafel, 59, resigned less than five months after the retailer disclosed a data breach that has jeopardized as many as 40 million payment card accounts since the Black Friday shopping bonanza over the Thanksgiving weekend.
The company later said that hackers had illegally accessed personal information such as phone numbers and email addresses from as many as 70 million customers.
Even after Target threw assurances and discounts at customers, the retailer’s revenue slid 5% during the Christmas quarter. The company has spent at least $61 million dealing with the hack, though $17 million of that was expected to be covered by insurance.
Target’s shares fell $2.14, or 3.5%, to $59.87 on Monday. Since Target first acknowledged the problem in mid-December, when the stock was selling for nearly $64 a share, the price has fallen as low as $55.07. The stock is down nearly 19% from its 52-week high.
Target’s board said Steinhafel “held himself personally accountable” for the breach, one of the largest on record at a retailer.
He probably decided to depart on his own once the scope of the breach became clear, said Jason Hanold, managing partner of executive search firm Hanold Associates.
“It was a matter of when he was going to leave, given the magnitude of the failure,” said Hanold, whose firm has placed senior leaders at Amazon.com Inc., Nike Inc. and Google Inc. “But I admire the timing — some boards could have had a knee-jerk reaction immediately after the fact that wouldn’t have given them the time to responsibly react and fix the problems.”
Steinhafel will serve as an advisor to Target, which has 1,789 U.S. stores and 127 Canadian locations. He became chief executive in 2008 and introduced fresh groceries and smaller-scale City Target store models.
its actually refreshing to see a CEO take some blame and do the right thing..bankers and politicians could learn something from it..he wasnt responsible for the hack but he was steering the boat at the time so he wears the blame..sounds fair to me..