A month after mutual fund giant Vanguard Group said it would enforce its mandatory retirement policy on founder and Senior Chairman John C. Bogle Sr.--and after Bogle vowed he wasn't about to resign--both have had a change of heart.
The 70-year-old Bogle, a legendary figure in the fund industry and the father of low-cost index mutual funds, agreed Friday to step down from Vanguard's board, ending a public relations nightmare for the Valley Forge, Pa.-based company.
But that was only after the board agreed to waive its rule for him, he said. "Things can be done with a decent enough level of grace when you put your mind to it," Bogle said in an interview Friday. "I was concerned from the outset that they weren't waiving the [mandatory retirement] policy for the founder. I said this should have been my decision to make."
He stressed that he has "great confidence" in the board and Vanguard's current chairman and chief executive, John Brennan.
Since the controversy over Bogle's retirement surfaced, there has been growing public speculation that a serious rift had formed between Bogle and Brennan, his hand-picked successor--and that Bogle was being forced out.
Bogle's departure from the board comes nearly 25 years to the day after he founded Vanguard, now the nation's second-largest mutual fund company, with more than $500 billion in assets under management. Bogle stepped down as Vanguard's chief executive in 1996, handing the job to Brennan.
Though he's leaving the board, Bogle will stay with the company. He will become president of Bogle Financial Markets Research Center, a new Vanguard-supported research unit.