Dive Brief:

• Discover Financial Services has named TD Bank executive Michael G. Rhodes as its next CEO and president, the card issuer announced Monday. He will take the helm March 6.
• The company’s board appointed Rhodes to the role Thursday, Discover said in a Monday filing with the Securities and Exchange Commission. He was also named president of the Riverwoods, Illinois-based company’s subsidiary, Discover Bank, the filing said.
• Rhodes, 58, had been the group head for Canadian personal banking at TD since January 2022, according to his LinkedIn profile. He joined TD in 2011 to lead the North American credit card and merchant services business, and he has some 25 years of experience in financial services, Discover said in the release.

Dive Insight:

Rhodes’ base salary will be $1 million, Discover said in Monday’s filing. He will also receive an annual short-term incentive award target of $2 million, and a long-term incentive award target of $7 million, the filing said. 

TD announced Rhodes’ resignation Monday, according to Reuters, which reported Rhodes was seen as a contender for the CEO post at that bank. 

Prior to his current role, Rhodes was group head of innovation, technology and shared services at TD from 2017 to the end of 2021, according to the bank’s most recent annual filing. He also served as head of the consumer bank at TD from 2015 to 2017. Rhodes has held senior leadership positions at Bank of America and MBNA America Bank, Discover said. 

Rhodes’ “extensive experience at large banks along with credit card/consumer background fits the criteria that (Discover) was looking for in a CEO as the company navigates through the regulatory/macro environment,” KBW analyst Sanjay Sakhrani wrote in a Monday note to investor clients. 

“He also seemed to be progressing upwards at TD Bank,” which suggests Rhodes “was handling his responsibilities well,” Sakhrani wrote.

While holding leadership roles at TD’s North American credit card and merchant services business, Rhodes helped elevate TD’s Canadian credit business from a ranking of sixth to first in the market, Mihir Bhatia, a Bank of America research analyst, wrote in a Monday note to investors. 

Rhodes will be appointed to Discover’s board of directors and the bank’s board when he takes the CEO post, Discover said. Come March, interim CEO John Owen will remain on the boards of both the company and the bank, the filing said.

The card issuer had been searching for a new CEO since former CEO Roger Hochschild resigned abruptly in August, after the company wrestled with compliance issues in recent years. During the company’s third-quarter earnings call in October, Owen said Discover was considering internal and external candidates. 

Discover Chairman Tom Maheras said he is confident the company will continue “to advance its commitments to enhancing compliance, risk management and corporate governance” under Rhodes’s leadership, he said in the release.

The appointment follows “a comprehensive search,” Maheras said in the release. Rhodes is an experienced executive “who has worked in a variety of roles within the payments and banking industry around the globe.”

TD shuffle

Rhodes’ exit prompted a leadership shuffle at TD.

Ray Chun, who most recently served as group head of wealth management and insurance, will take Rhodes’ place, TD announced Monday. Chun joined TD in 1992 and has held various leadership roles across the bank, including in personal banking products, branch banking and as president of TD Insurance, among others.

“Ray is a proven leader with a strong track record of building successful businesses, delivering innovative solutions and developing talent. He brings a deep understanding of the market and a relentless focus on the customer to his new role,” TD CEO Bharat Masrani said in a statement.

The lender named Tim Wiggan to take Chun’s place, effective immediately, according to Monday’s release.

Wiggan most recently served as vice chair of TD Securities and co-head of global investment banking. Wiggan was also CEO of TD Asset Management from 2013 to late 2016, according to the press release.

“Tim has demonstrated his ability to grow both our Wealth and Capital Markets businesses and to develop long-term trusted relationships with our clients,” Masrani said. “He will continue to leverage OneTD, expand our Canadian, U.S. and international Wealth business, and deliver the next phase of growth in Wealth Management and Insurance.”