Target CIO First Executive To Leave Following Massive Data Breach
Target (NYSE: TGT) on Wednesday confirmed that its Chief Information Officer Beth Jacob is resigning. The company said that Jacob's departure was her decision, but investors and followers of the data breach story may think otherwise.
Target revealed right before Christmas that it has been victim of a data breach that affected 40 million payment cards and 70 million Target accounts. If the company ever needed a scapegoat to take the fall, it would be Jacob.
Jacob first joined Target in 1984, working as an assistant buyer in the Dayton's department store division. She left the company in 1986, but returned 16 years later as head of guest contact centers. In 2006, she became vice president of guest operations and then was named Senior Vice President and CIO in 2008.
“While we are still in the process of an ongoing investigation, we recognize that the information security environment is evolving rapidly," Target CEO Gregg Steinhafel said in a statement. "To ensure that Target is well positioned following the data breach we suffered last year, we are undertaking an overhaul of our information security and compliance structure and practices."
Brian Sozzi, CEO & Chief Equities Strategist at Belus Capital Advisors, thinks that Steinhafel should have acted quicker to shuffle up his management team.
In an e-mail to Benzinga, Sozzi emphasized that Steinhafel should have began rebuilding his management team on January 1, 2014 -- and certainly before the most recent earnings call on February 26 -- so that the company "had a more thorough story to share with investors."
The Minneapolis-based company will look to hire an outside candidate to replace Jacob. Target also announced it will consult with Promontory Financial Group, a global consulting firm that advises clients on a wide variety of financial services matters, including cyber security.
To date, Target's liabilities from the data breach has surpassed $61 million. During Target's fourth quarter report on February 28, the company said that three-quarters of its liabilities was offset by a $44 million insurance payment. It is unclear how damaging the final impact from the data breach will be. Target has yet to release any estimates related to its total financial obligations.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.