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Published: Monday, 5/5/2014

Target's chairman and CEO out in wake of breach

ASSOCIATED PRESS
Gregg Steinhafel Gregg Steinhafel
ASSOCIATED PRESS Enlarge

NEW YORK — Target’s massive data breach has now cost the company’s CEO his job.

Target announced today that Chairman, President, and CEO Gregg Steinhafel is out nearly five months after the retailer disclosed the breach, which has hurt its reputation among customers and has derailed its business.

The nation’s third-largest retailer said Mr. Steinhafel, a 35-year veteran of the company and CEO since 2008, has agreed to step down, effective immediately. He also resigned from the board of directors.

A company spokesman declined to give specifics on when the decision was reached.

The departure suggests the company is trying to start with a clean slate as it wrestles with the fallout from hackers’ theft of credit and debit card information on tens of millions of customers. The company’s sales, profit and stock price have all suffered since the breach was disclosed.

Target, based in Minneapolis, said Chief Financial Officer John Mulligan has been appointed interim president and CEO. Roxanne S. Austin, a member of Target’s board, has been named as interim nonexecutive chair of the board. Both will serve in those roles until permanent replacements are named.

Mr. Steinhafel will serve in an advisory capacity during the transition. Jim Johnson remains lead independent director on the board.

Mr. Steinhafel’s tenure has been rocky. The company has struggled with its expansion into Canada, its first foray outside of the United States. The company, known for its cheap chic clothing and home decor, also has seen uneven sales since the recession ended as it confronts fierce competition.

Under Mr. Steinhafel’s leadership, the company has expanded into fresh groceries and offered a 5 percent discount to customers who use its branded debit and credit cards. But clearly the breach was a big black eye on Mr. Steinhafel’s term.

“The last several months have tested Target in unprecedented ways,” Mr. Steinhafel wrote in a letter to the board that was made available to the Associated Press. “From the beginning, I have been committed to ensuring Target emerges from the data breach a better company, more focused than ever on delivering for our guests.”

Mr. Steinhafel’s departure comes two months after the company announced that Chief Information Officer Beth Jacob resigned and outlined a series of changes it was making to overhaul its security systems and its security department.

Last week, Target named Bob DeRodes, who has 40 years of experience in information technology, as its new chief information officer. Target said it is continuing its search for a chief information security officer and a chief compliance officer.

Target also said last week that MasterCard Inc. will provide branded credit and debit cards with a more secure chip-and-PIN technology next year. That will make Target the first major U.S. retailer that will have store cards with this technology.



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