Equifax CEO suddenly 'retires' following an epic data breach affecting up to 143 million people

Key Points
  • The sudden departure comes amid intensifying scrutiny of the breach and the company's handling of it.
  • Richard Smith had been named chairman and CEO in 2005 after more than two decades as an executive of General Electric.
  • In a regulatory filing on Tuesday, the company said Smith will not get a bonus for this year.
  • Equifax shares have dropped 27 percent in September after the company disclosed the breach.
Equifax CEO retires following an epic data breach

Richard Smith, CEO and chairman of Equifax, abruptly retired Tuesday following a data breach at the credit-reporting service that affected the personal information of 143 million people.

Equifax shares traded up 0.8 percent Tuesday afternoon. They have fallen 26 percent in September after the company revealed the breach.

The announcement was made Tuesday by Mark Feidler, a current board member, who will serve as nonexecutive chairman. Paulino do Rego Barros Jr., president of company's Asia Pacific region, has been appointed as interim CEO.

Smith, who was 57 as of the company's proxy statement in March, became CEO and chairman in 2005 after 22 years at General Electric in senior roles in various divisions. He is to appear at a hearing of the Senate Banking Committee on Oct. 4 and is the only person scheduled to testify. He is also scheduled to testify next week at a hearing of the House Energy and Commerce Committee.

Equifax CEO Richard F. Smith.
Noah Berger | Bloomberg | Getty Images

In a statement Tuesday, Sen. Brian Schatz, D-Hawaii and member of the banking committee, said Smith's departure just days before his scheduled appearances in Congress "is an abdication of his responsibility."

"I fully expect Mr. Smith to testify before the Banking Committee next week, regardless of the timing of his retirement," Schatz said. Earlier on Twitter, the House Energy and Commerce Committee said Smith would testify on Oct. 3.

An Equifax spokeswoman said in an email she was working on a response to whether Smith would still testify.

The breach has sparked multiple investigations at the state and federal level, including the Department of Justice in Atlanta, where Equifax is based, and the Federal Trade Commission. The company said its chief information officer and chief security officer retired earlier this month.

Three other executives, including the chief financial officer, have drawn scrutiny for selling $1.8 million of company stock just days after the breach was discovered internally but nearly six weeks before it was announced to the public.

Equifax CEO suddenly retires following massive data breach

Smith's salary for 2016 was $1.45 million and his bonus was $3.045 million. In a regulatory filing on Tuesday, the company said Smith will not get a bonus for this year and any other decisions regarding how his departure has been characterized or how much the company owes him will be deferred until the board completes an independent review of the breach and the response to it.

In a statement on Tuesday, Feidler said, "The Board remains deeply concerned about and totally focused on the cybersecurity incident. We are working intensely to support consumers and make the necessary changes to minimize the risk that something like this happens again."

He added that the board has formed a special committee to focus on the issues arising from the breach and make sure all appropriate actions are taken. "Speaking for everyone on the Board, I sincerely apologize."

In the same statement, Smith said he believed it is in the best interests of the company to have new leadership "to move the company forward."

Feidler is a partner and co-founder of a private equity firm and has been an independent director of Equifax since 2007. Barros, the interim CEO, recently oversaw Equifax's Asia-Pacific business, including the company's largest-ever acquisition.