Visa Inc. said Chief Executive Officer Charles Scharf is resigning after advising the board that he can no longer spend enough time in San Francisco “to do the job effectively.”
The San Francisco-based payments network said Mr. Scharf will be succeeded by Alfred Kelly, 58 years old, a member of Visa’s board and a former president at American Express Co. In an interview, Mr. Scharf said he needs be closer to his family in New York.
“I think to do this job properly you need to be committed to spending the appropriate amount of time in San Francisco. Given my personal situation, I don’t feel that I can do that right now,” he said .
Robert W. Matschullat, Visa’s independent chairman, said in a conference call with analysts that Mr. Scharf’s resignation was “entirely a personal decision and not business-related and we respect his choice.” Visa shares fell about 1.5% in after-hours trading.
In a memo to Visa employees Monday, Mr. Scharf noted that his daughters, parents and extended family are all on the East Coast. Before taking the Visa job in 2012, Mr. Scharf lived in New York.
“I love working and running this great global company and I am sad to have reached the conclusion that I should step down, but running a San Francisco based company just doesn’t work for me personally right now and wouldn’t be fair to Visa,” Mr. Scharf said in a news release. Mr. Scharf also will step down from Visa’s board.
Mr. Scharf, 51, took Visa’s helm after spending most of his career in the banking industry, including a seven-year stint running the enormous retail-banking division of J.P. Morgan Chase & Co. Mr. Scharf worked for many years with J.P. Morgan Chief Executive Officer James Dimon and was widely considered one of his top lieutenants.
During Mr. Scharf’s tenure at Visa, its stock generated a total return including dividends of 144% versus 64% for the S&P 500. In after-hours trading, Visa shares were down 1.3% to $81.10.
Like other longtime payments companies, Visa is facing intense competition from a new breed of financial technology companies. Visa is also joining with such companies as it seeks to expand the use of electronic payments across the globe.
Much of that transformation has taken place during Mr. Scharf’s time at Visa. He has also had to navigate an often-tense relationship with some of the nation’s largest merchants, including Wal-Mart Stores Inc.
Mr. Scharf also upended Visa’s corporate culture to make the former bank-owned cooperative more efficient. Last year, Visa bought its European counterpart Visa Europe for more than $20 billion in a long-awaited deal that brought the payment network’s global operations under one roof.
Mr. Scharf also played a major role in the summer in striking a deal to end a long-running fight with PayPal Holdings Inc. PayPal agreed to stop steering customers away from Visa cards in exchange for Visa agreeing not to increase fees that it charges to PayPal.
In an interview, Mr. Kelly said he feels well-prepared to take on the Visa job even though he has technically been out of the industry for some time. A Visa board member since 2014, Mr. Kelly was named earlier this year as CEO of Intersection, a technology and media company behind an initiative to bring public Wi-Fi to New York City.
“My [Visa] board service has allowed me to stay enormously close to an industry that I stayed almost 2½ decades in prior to this,” Mr. Kelly said. Since leaving AmEx he also served as the CEO of the 2014 NY/NJ Super Bowl Host Committee and as chairman of the 2015 Papal visit to New York City.
Visa processes credit-card and debit-card payments on behalf of the nation’s banks and merchants. It doesn’t set interest rates or issue cards. The company has a market value of $190 billion, more than one-third larger than rival MasterCard Inc.
Mr. Matschullat described Mr. Scharf as a “visionary CEO, highly successful by any set of metrics.”
Mr. Kelly will join the company on Oct. 31 as CEO-designate. Mr. Scharf will serve as an adviser to Mr. Kelly starting on Dec. 1 for several months.
Mr. Scharf said he approached the board in mid-September to advise them that he was considering stepping down, and then submitted his resignation on Monday morning.
Mr. Matschullat sought to assure analysts that the board conducted a thorough search for a replacement. The board began working on a succession plan in mid-September when Mr. Scharf raised the potential of stepping down, he said.
“We wanted someone who was up and running,” Mr. Matschullat said on a conference call with analysts.
“Change always brings some level of uncertainty but we continue to believe the Visa story remains a solid one and reiterate the (outperform) rating,” wrote Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods.
The company is slated to report quarterly earnings on Oct. 24.
Resource : http://www.wsj.com/articles/visa-ceo-charles-scharf-is-stepping-down-1476735288