
While Vanguard is trying to paint the recent transition from its now-former CEO Tim Buckley to Salim Ramji as a planned transition, Buckley’s abrupt departure raised eyebrows among Vanguard watchers. Why did Buckley abruptly leave Vanguard after 33 years? In announcing his departure on LinkedIn, Buckley wrote:
Thirty-three years ago, I was lucky to join Vanguard, an investment company that believed in giving investors a fair shake. I’ve had the privilege to serve on our senior leadership team for 23 years and am in my seventh year leading this incredible organization and crew as CEO. Our funds and ETFs power the portfolios of more than 50 million investors globally, our differentiated digital and hybrid advice offers are helping investors stay on track with their financial goals, and we’ve redesigned our client experience to support better investing behaviors and outcomes. Our crew are more impressive and accomplished than ever and our senior leadership team is the best in the business. I’m proud of what we’ve achieved together and couldn’t be more excited about the opportunities Vanguard has ahead. And so it’s time for others now. By the end of this year, I will retire from Vanguard.
“And so it’s time for others now.” That’s not much of an explanation as to why he’s leaving.
Barron’s Andrew Welsch asked, “What is really going on at Vanguard?”
Jeff DeMaso, editor of the Independent Vanguard Adviser newsletter, said, “It caught a lot of us by surprise.”
And while Buckley was a long-time veteran of Vanguard, his time as CEO was the company’s shortest ever. Jef Benjamin, the wealth management editor at ETF.com, wrote, “At about six years, Buckley’s tenure as CEO is the shortest of the four executives that have led Vanguard during its 49-year history.”
Think Advisor’s Dinah Wisenberg Brin said that “Vanguard watchers” are “baffled over CEO’s retirement news.” She wrote: “Vanguard CEO Tim Buckley’s surprise decision to retire by year-end, with no successor named, has left industry watchers wondering what’s next for one of the world’s largest asset managers.”
Action Line: So, why did Buckley surprise so many with a retirement? Why didn’t Vanguard already have a succession plan in place? This isn’t how the company normally moves from one CEO to the next. The question is, does it signal some underlying problem at Vanguard, or an underlying problem with Tim Buckley? If it’s the former, investors should be worried that the company has deep issues that can’t be resolved. If it’s the latter, investors should be worried that the company didn’t sniff out problems with Buckley sooner. If you want to talk about why I think Vanguard is too big, I’m here. In the meantime, please click here download my SPECIAL REPORT: The Trouble with BlackRo… er… ummm, Vanguard.