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Entries in Resignation (11)

Friday
Oct262012

Fired or Resigned: Should CEOs be Treated Differently?

Andrey Rudakov/Bloomberg via Getty Images(NEW YORK) -- The Securities and Exchange Commission has launched an informal investigation to determine if Citigroup misled shareholders when it claimed former CEO Vikram Pandit "resigned" on Oct. 16.  Pandit and Citigroup Chairman Michael O'Neill told investors in conference calls and interviews that the decision to step down was Pandit's alone.

"Vikram chose to submit his resignation and the board accepted it," O'Neill said that day.

But according to Bloomberg and the Wall Street Journal, just after the market closed a day earlier, the board -- which had allegedly lost confidence in Pandit -- told him to step down later that day.  O'Neill failed to mention this during the company's third-quarter earnings call, which, along with O'Neill's statement that Pandit left on his own volition, is a potential regulatory infraction.

"If the board pushed Pandit out, then Citigroup issued a false statement," former SEC chairman Harvey Pitt told CNBC.  "The reason for the CEO's departure is material, and Citigroup had an obligation to disclose any information necessary to render its statements fair, accurate and complete.  If the board forced Pandit out, Citigroup didn't do that."

Whether Citigroup did anything illegal remains to be seen.  But it does bring up another question: Should CEOs be allowed to say they quit when, in fact they were forced out?  After all, unless they have done something terrible, most employees are allowed to say they quit when in fact they were asked to leave.  Should a CEO be held to different rules?

"What often happens when companies do layoffs or want to push an individual out the door, they will do a 'mutual consent resignation' whereby they agree that the employee will go without a fight, and in turn they will not fight unemployment benefits," said ABC's Good Morning America workplace contributor Tory Johnson.  "It will also look better on your record that you were not terminated or fired."

With the head of a large corporation like Citigroup, "Most people know the 'I've decided to pursue other things' is code for 'They booted me!' she said.  "It's totally a courtesy.  Fired, laid off, voluntarily, involuntarily -- it's semantics."

Outplacement expert John Hotard believes the issue is more about compensation and legal issues than anything else.

"The big guys don't want salary because of PR and taxes.  They prefer stock and options.  The law of compensation is that if you get fired you don't get your unvested stock options.  But if you are allowed to resign, then all that money is yours.  You don't want to have a senior person sue a bank or corporation, so you let them resign," he said.

Michael Kaufman, managing partner at Kaufman Dolowich Voluck & Gonzo, which has a specialty in employment law on behalf of companies, agrees that barring some major offense, chief executives should be given the same opportunities as every other employee in America.

"There are a lot of market forces that aren't necessarily a CEO's fault," he said.  "Look at the economic cycle we're currently in.  In some cases it may not be possible for them to hit their targets.  So, they're given the opportunity to resign.  I think it's fine."

However, he added, there is a difference with CEOs of public companies and their boards because they must also weigh their duties to their shareholders.

The main issue with Pandit is timing, Kaufman said.

"If the company had waited a month after they had done their earnings call, the SEC probably wouldn't be up in arms," he said.  "But a couple of hours later they say 'The CEO has resigned.'  The SEC is saying, why didn't you disclose this on the call?  It may very well be that Pandit, after the call, said 'I can't do this anymore.'  But that's what the SEC wants to know."

Copyright 2012 ABC News Radio

Tuesday
Jul032012

Barclays CEO Bob Diamond Steps Down

Bruno Vincent/Getty Images(NEW YORK) -- Another top executive at Barclays has resigned amid allegations that the U.K.-based bank tried to manipulate worldwide interest rates for its own financial gain.

Bob Diamond announced on Tuesday he was stepping down as chief executive and director of Barclays with immediate effect.  His resignation comes a day after Barclays Chairman Marcus Agius announced he was leaving his position.

Reflecting on his 16 years at the bank, Diamond said in a statement, "My motivation has always been to do what I believed to be in the best interests of Barclays.  No decision over that period was as hard as the one that I make now to stand down as Chief Executive.  The external pressure placed on Barclays has reached a level that risks damaging the franchise -- I cannot let that happen."

[CLICK HERE TO READ HIS FULL STATEMENT]

The CEO said he's "deeply disappointed" by the impression the allegations have left on the bank and said he looks "forward to fulfilling my obligation to contribute to the Treasury Committee’s enquiries related to the settlements that Barclays announced last week."

Last Wednesday, Barclays reached a $453 million settlement with regulators in the U.S. and U.K. for trying to influence the London Interbank Offered Rate (LIBOR) -- the worldwide benchmark for interest rates -- for a period of years dating back at least until 2005.

The LIBOR rate is supposed to reflect the rate at which top banks in London lend to each other.  It is used in the U.S. and other nations to set rates for student loans, mortgage rates, credit cards and car loans.

Diamond is scheduled to appear before the Treasury Committee on Wednesday.  Barclays said the search for his successor will begin immediately and will be handled by Agius, who will become full-time chairman while the bank looks for a new CEO.

Copyright 2012 ABC News Radio

Monday
Jul022012

Barclays Chairman Resigns Amid Rate-Rigging Allegations

Bruno Vincent/Getty Images(NEW YORK) -- The chairman of Barclays announced on Monday he was stepping down in the wake of allegations that the U.K.-based bank tried to manipulate worldwide interest rates for its own financial gain.

Last week, the world's third largest bank was hit with $453 million in fines by U.S. and British regulators for trying to influence the London Interbank Offered Rate (LIBOR) -- the worldwide benchmark for interest rates -- for a period of years dating back at least until 2005.  

The LIBOR rate is supposed to reflect the rate at which top banks in London lend to each other.  It is used in the U.S. and other nations to set rates for student loans, mortgage rates, credit cards and car loans.

In a statement Monday, Barclays Chairman Marcus Agius said "last week’s events -- evidencing as they do unacceptable standards of behaviour within the bank -- have dealt a devastating blow to Barclays reputation.  As Chairman, I am the ultimate guardian of the bank’s reputation.  Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside."

[CLICK HERE TO READ THE FULL STATEMENT]

He apologized for the allegations, saying he was sorry that "customers, clients, employees and shareholders have been let down," and said that an audit will be launched on the bank's business practices.

Agius will remain in his position at Barclays until a successor is chosen.  The bank's board will begin its search for a new chairman on Monday.

Copyright 2012 ABC News Radio

Wednesday
Apr112012

Best Buy CEO Quits Amid Probe into Personal Conduct

KAREN BLEIER/AFP/Getty Images(MINNEAPOLIS) -- When Brian Dunn announced on Tuesday he was stepping down as CEO of Best Buy, it appeared to be related to the company's financial struggles as a big box retailer. 

But a statement released later that day by Best Buy shows Dunn's resignation came after the company launched a probe into his personal conduct.

"Certain issues were brought to the board's attention regarding Mr. Dunn's personal conduct, unrelated to the company's operations or financial controls, and an audit committee investigation was initiated," the statement read.  "Prior to the completion of the investigation, Mr. Dunn chose to resign."

The company did not give any further details on its inquiry.

Earlier Tuesday, Best Buy said: "There were no disagreements between Mr. Dunn and the company on any matter relating to operations, financial controls, policies or procedures.  There was mutual agreement that it was time for new leadership to address the challenges that face the company."

Board director G. Mike Mikan was chosen to serve as the interim CEO while the company looks for a permanent replacement.

Copyright 2012 ABC News Radio

Tuesday
Apr102012

Best Buy CEO Brian Dunn Resigns

KAREN BLEIER/AFP/Getty Images(MINNEAPOLIS) -- After being out-maneuvered by Internet rivals with lower operating costs, Best Buy has fallen on hard times.  Now, the big retailer says its CEO Brian Dunn has resigned and will step down from the board.

“There were no disagreements between Mr. Dunn and the company on any matter relating to operations, financial controls, policies or procedures,” Best Buy said in a statement Tuesday from its corporate headquarters in Minneapolis.  “There was mutual agreement that it was time for new leadership to address the challenges that face the company."

The company said board director G. Mike Mikan will serve as the interim CEO while its looks for a permanent replacement.

Last month, Best Buy announced it would close 50 big box stores this year and test much smaller stores in several cities.

The company has suffered from a double whammy.

Many of the products it sells -- cameras, video game consoles, CDs and DVDs -- have been the victims of technological change as consumers shift buying habits and game playing to the Internet.

Best Buy is also part of the broader decline in big box retailing.  Circuit City and Borders went out of business, while Barnes and Noble stores have also suffered from falling revenues.

Copyright 2012 ABC News Radio

Tuesday
Jan102012

Fannie Mae CEO Michael Williams to Resign

Mark Wilson/Getty Images(WASHINGTON) -- Fannie Mae announced Tuesday that CEO Michael J. Williams will step down.  He became president and CEO of Fannie Mae in April 2009.

“As CEO, I have focused the company on providing the necessary funding to support sustainable homeownership and quality affordable housing; creating the solutions needed to stabilize the market and help homeowners in distress; and building a strong new leadership team that can move the company and the industry forward,” said Williams.  “For the past three years, we have executed on this important mission, while making fundamental changes to prepare housing finance for a better future.  I decided the time is right to turn over the reins to a new leader.  As I told our employees today, I am extremely proud of what we have achieved together, and I am confident that they will continue to make a positive difference.”
 
Along with other executives at Fannie Mae and Freddie Mac, he recently came under criticism for receiving multimillion-dollar salaries and bonuses, while the giant housing agencies still owe the U.S. government bailout funds.
 
The agencies have been blamed by some for irresponsibly promoting homeownership and contributing to the housing bubble.

Williams will remain in his post as CEO until the company's board of directors names a successor.

Copyright 2012 ABC News Radio

Friday
Nov042011

Jon Corzine Steps Down as CEO of MF Global

Stephen Yang/Bloomberg via Getty Images(NEW YORK) -- Jon Corzine, the former governor of New Jersey, has resigned from his posts as the chairman and CEO of MF Global, the embattled securities firm announced Friday.

According to the firm, he will not be seeking a severance package.

Corzine's resignation comes four days after MF Global filed for Chapter 11 bankruptcy protection.  The company's collapse is mostly attributed to its exposure of $6 billion to European sovereign debt out of $41 billion in total assets, according to Janney Capital Markets.

Copyright 2011 ABC News Radio

Thursday
Oct132011

Solyndra CEO Brian Harrison Resigns

Ken James/Bloomberg via Getty Images(FREMONT, Calif.) -- The CEO of Solyndra, a California-based solar energy company that received a controversial $535 million loan guarantee from the Obama administration, has resigned.

In papers filed with a bankruptcy court Wednesday, Solyndra said that Brian Harrison had left his post on Friday, Oct. 7, "as contemplated even before these cases were commenced." Solyndra shut its doors and declared bankruptcy six weeks ago.

Solyndra filed the papers in a Delaware court in response to a motion by the Department of Justice to appoint a trustee to oversee the company's bankruptcy case. The Justice Department filed its motion after Harrison and Solyndra's CFO, W.G. Stover invoked the Fifth Amendment and refused to answer questions from a Congressional committee probing the Solyndra loan during a Sept. 23 hearing. The company is also under investigation by the Justice Department, the Treasury Department and the Department of Energy's Inspector General.

The Obama administration had selected Solyndra as the first to receive a loan under an Energy Department program designed to provide government support to companies that would create jobs while generating energy from cleaner sources, such as solar, wind and nuclear. President Obama personally visited the Solyndra complex, hailing it as a leader in the field.

In August, Solyndra abruptly shut its doors, laying off 1,100 workers. Within days, it had declared bankruptcy. The House Energy and Commerce Committee's investigative subcommittee has held two hearings intending to unwind the deal and understand how signs of Solyndra's financial trouble had been overlooked by the Department of Energy.

A week after Solyndra's bankruptcy filing, federal agents searched the company's California headquarters, and visited the homes of Harrison, company founder Chris Gronet and a former executive.

Solyndra spokesman David Miller confirmed agents visited Harrison's home on the same day the FBI and Energy Department Inspector General seized boxes of records from the company's headquarters.

"Yeah, they did go to his house and speak to him briefly," Miller said. "I don't know what they may have taken. I believe they took a look at his computer."

Julie Sohn, a spokeswoman with the FBI in San Francisco, declined to discuss details of the government's investigation. "Unfortunately, our affidavits are still sealed so we can't go into any details," Sohn said.

In March, ABC News, in partnership with the Center for Public Integrity's iWatch News, began reporting on simmering questions about the role political influence may have played in Solyndra's selection as the Obama administration's first loan guarantee recipient.

Damien LaVera, an Energy Department spokesman, has told ABC News that politics never entered the decision to grant the loan, or restructure it earlier this year. LaVera said the department decided it was worth trying to redo the terms to try to salvage the government's initial investment.

"[P]olitical or optical considerations took a backseat to putting the company and its workers in a better position to succeed and repay the loan," he said.

The House Energy and Commerce Committee has sought information from Solyndra's prime investors -- including Oklahoma oil billionaire George Kaiser, a bundler of campaign contributions to the president in 2008.

Copyright 2011 ABC News Radio

Wednesday
Aug242011

Steve Jobs Resigns as Apple CEO

David Paul Morris/Bloomberg via Getty Image(CUPERTINO, Calif.) -- After several years of failing health and medical leaves of absence, Apple CEO Steve Jobs resigned Wednesday from Apple Inc.  In a letter to the company's board of directors, Jobs wrote that he is no longer able to meet his duties and expectations as CEO.

"I have always said if there ever came a day when I could no longer meet my duties and expectation as Apple's CEO, I would be the first to let you know," Jobs wrote in a letter to the Apple board and community.  "Unfortunately, that day has come."

Jobs, the mastermind behind the iPad, iPod, iPhone, iTunes and so much more of the iconic company's identity, has become such a looming figure in popular technology that you'd think he invented the apple, not just headed the company.  

Jobs' health has been a public issue since 2004, when he announced that he had a rare -- and treatable -- form of pancreatic cancer.  In early 2009, he took a medical leave, and it was later revealed, traveled to Memphis, Tenn. for a liver transplant.  He came back to work full-time later that year, but in January of this year he took another medical leave.  

Effective immediately, the company says in a release, Jobs will join the board of directors as Chairman of the Board. The board has named Tim Cook to succeed Jobs as CEO.  

Cook was previously Chief Operating Officer at Apple Inc. and has been with the company for 13 years, overseeing the company's global sales activities and once serving as head of the Apple Macintosh division.

In his resignation letter to the board, Jobs strongly recommended that it go forward with its succession plan and appoint Cook to the role of CEO.  He also alluded to his vision for continued success for Apple and graciously thanked his colleagues.

"I believe Apple's brightest and most innovative days are ahead of it.  And I look forward to watching and contributing to its success in a new role," he wrote Wednesday.

"I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you."

Copyright 2011 ABC News Radio

Wednesday
Aug242011

Steve Jobs' Resignation Letter to Apple Board of Directors

(CUPERTINO, Calif.) -- On Wednesday, in a letter to the board of directors, Steve Jobs formally announced his resignation as CEO of Apple Inc. Here is the full text: To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple. I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role. I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve

Copyright 2011 ABC News Radio







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