NEW YORK -- Target's massive data breach has now cost the company's CEO his job.
Target announced Monday 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 hammered its business.
Experts say his departure marks the first CEO of a major corporation to resign in the wake of a data breach and underscores how CEOs are now becoming more at risk in an era when such breaches have become common.
The nation's third-largest retailer said 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.
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.
A company spokeswoman declined to give specifics on when the decision was reached. But in a statement issued Monday, the board said that after extensive discussions with Steinhafel, they both "have decided it is the right time for new leadership at Target."
The company's stock fell more than 3 percent Monday morning. It lost 3.45 percent at the close.
Target, based in Minneapolis, said Chief Financial Officer John Mulligan has been appointed interim president and CEO. Roxanne Austin, a member of Target's board, has been named interim nonexecutive chair of the board. Both will serve in those roles until permanent replacements are named.
Steinhafel will serve in an advisory capacity during the transition. Jim Johnson remains lead independent director on the board.
"He was the face of the public breach. The company struggled to recover from it," said Cynthia Larose, chair of the privacy and security practice at the law firm Mintz Levin. "It's a new era for boards to take a proactive role in understanding what the risks are."
Steinhafel's tenure has been tested with many challenges, from a weak economy to a proxy fight. The company, known for its cheap chic clothing and home decor, has seen uneven sales since the recession ended and has battled a perception that its prices aren't as low as its rivals.
Under Steinhafel's leadership, the company has won kudos for expanding into fresh groceries and offered a 5 percent discount to customers who use its branded debit and credit cards. In 2009, he successfully defended the company in a proxy fight against activist hedge fund manager William Ackman, who was pushing his own slate of candidates to the board.
But the company recently has been faced with fiercer competition from Amazon.com and Wal-Mart. Recently, difficulties with expansion in Canada, Target's first foray outside the U.S., has hurt profits. But the breach was the biggest black eye on Steinhafel's tenure.