It was probably not a shocker to most people that Richard Smith is no longer CEO of the credit rating agency Equifax. After all, he had presided over a deplorable mess that could end up costing half the country millions and millions of dollars as the victims of identity theft.
Equifax had been entrusted with the personal information of millions of Americans. Its mission was to provide accurate credit reporting while keeping the vital information safe and secure.
But the Equifax security was so weak that it was hacked and the personal information of more than 143 million Americans was stolen. The company’s first responses were an embarrassment. The story is nothing short of a national crisis. In fact, it is more important than whether National Football League players stand, kneel, sit or stand on their heads during the playing of the National Anthem.
What is surprising about Smith’s departure is that he was allowed to retire. He didn’t quit. The board didn’t fire him. Nope, he retired.
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Why wouldn’t the company simply fire him? After all, it fired the chief information officer and the chief security officer. Well, during Smith’s time at Equifax, the company expanded operations dramatically and the company’s stock price rose 200 percent, with market value jumping from $3 billion to $20 billion. He was good at the money part.
However, as CEO, Smith was also the company’s chief risk officer. A top executive must weigh risk to the enterprise with each and every decision made. It goes with the territory. And, judging from the emerging details of this scandal, Smith may not have been very good at that part of the job.
The hack was apparently not a difficult one, and the hackers even taunted the company for its horrible cybersecurity.
To be fair, a Securities and Exchange Commission filing indicates that Smith will not get his bonus this year. But before anyone begins to tear up about that, it should be noted that his compensation package will pencil out to about $15 million. That little parachute should cushion the fall just a bit.
At least Smith had the good sense to wait until the hack became public before announcing his retirement. Several other top executives took their retirement packages before the public knew about the hack. Does that slimy bit of corporate intrigue remind anyone of anything? Like, say, Enron? By the way, those guys went to jail.
Retired or not, these folks still have a whole lot of explaining to do.
Smith is scheduled to testify next Tuesday in front the House Energy and Commerce Committee and the next day before the Senate Banking Committee.
All of us should be extremely interested in what he and others from Equifax have to say. Stay tuned.