Target CEO Gregg Steinhafel resigns following tumultuous, controversial six-year tenure
UPDATE: While Gregg Steinhafel resigned in 2014, the repercussions of his actions were still being felt in March 2015 when it was announced that thousands of Target employees would be laid off while Steinhafel received a $61 million golden parachute upon his departure.
This morning, Target CEO Gregg Steinhafel resigned all his positions at the company, citing last winter's massive data breach, a debacle that was quickly followed by layoffs and an announcement of dramatically decreased profits during the most recent holiday season.
Steinhafel, 59, attempted to place blame for the breach on his shoulders, and he cited the fallout as a reason for this morning's move in the resignation letter he penned to the company's board of directors.
"The last several months have tested Target in unprecedented ways," Steinhafel writes. "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. We have already begun taking a number of steps to further enhance data security, putting the right people, processes and systems in place. With several key milestones behind us, now is the time for new leadership at Target."
A statement from Target's board of directors says, "The board is deeply grateful to Gregg for his significant contributions and outstanding service throughout his notable 35-year career with the company." It adds that John Mulligan, Target's chief financial officer, has been appointed as interim president and chief executive officer, while Roxanne Austin, a current member of Target's board of directors, is interim non-executive chair of the board.
Steinhafel presided over a tumultuous six years at Target. At one time he was the highest paid CEO in Minnesota, and the gap between his salary and the company's performance led the Minneapolis-St. Paul Business Journal to proclaim him one of the state's most overpaid CEOs back in 2011. The year before, Steinhafel, a heavy Republican donor, mired himself and his company in controversy for giving $150,000 to a conservative group that opposed marriage equality. In 2012, the company ran gay-friendly ads but still refused to take a public stance on the marriage amendment. Meanwhile, sales were disappointing.
Other embarrassments the company endured during Steinhafel's time as CEO included a recent photoshop fail involving a swimsuit model's crotch, the leaking of a ludicrously racist training document that produced a discrimination lawsuit, two gaffes involving products with regrettable names being sold online within a week, controversy over Target stores opening on Thanksgiving despite worker protests, the leaking of unflattering training videos revealing how the company indoctrinates its employees, and allegations of union busting.
Nonetheless, Steinhafel's departure is being framed as a mutual choice. To read the statement written by Target's board of directors, click to page two. Steinhafel's letter of resignation is on page three.
Statement from Target's Board of Directors
MINNEAPOLIS -- May 05, 2014
Target's board of directors issued the following statement today:
"Today we are announcing that, after extensive discussions, the board and Gregg Steinhafel have decided that now is the right time for new leadership at Target. Effective immediately, Gregg will step down from his positions as Chairman of the Target board of directors, president and CEO. John Mulligan, Target's chief financial officer, has been appointed as interim president and chief executive officer. Roxanne S. Austin, a current member of Target's board of directors, has been appointed as interim non-executive chair of the board. Both will serve in their roles until permanent replacements are named. We have asked Gregg Steinhafel to serve in an advisory capacity during this transition and he has graciously agreed.
The board is deeply grateful to Gregg for his significant contributions and outstanding service throughout his notable 35-year career with the company. We believe his passion for the team and relentless focus on the guest have established Target as a leader in the retail industry. Gregg has created a culture that fosters innovation and supports the development of new ideas. Under his leadership, the company has not only enhanced its ability to execute, but has broadened its strategic horizons. He also led the company through unprecedented challenges, navigating the financial recession, reacting to challenges with Target's expansion into Canada, and successfully defending the company through a high-profile proxy battle.
Most recently, Gregg led the response to Target's 2013 data breach. He held himself personally accountable and pledged that Target would emerge a better company. We are grateful to him for his tireless leadership and will always consider him a member of the Target family.
The board will continue to be actively engaged with the leadership team to drive Target's future success and will manage the transition. In addition to the appointments of the exceptional leaders noted above, we have also retained Korn Ferry to advise the board on a comprehensive CEO search.
The board is confident in the future of this company and views this transition as an opportunity to drive Target's business forward and accelerate the company's transformation efforts."
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