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Investing Specialists

Vanguard CEO Brennan Says 'The Time Is Right' to Step Down

Fund firm picks the head of its institutional business to succeed Brennan.

Vanguard's chairman and chief executive officer Jack Brennan decided to relinquish the reins of one of the world's largest mutual fund companies. "It's the right time," he said in an interview Friday.

Vanguard announced on Friday that its board of directors had elected F. William McNabb III as president, effective March 1, and said he would succeed Brennan as CEO within a year. The news came as a surprise because Brennan is just 53 and has offered no hints in previous conversations with Morningstar that he was considering stepping aside. Brennan, who will remain Vanguard's chairman, said it was his idea to give up the fund family's top job, and that he worked with the board to settle on a successor. No personal issues, such as illness, are behind the decision, Brennan maintained. He explained his decision by saying he believes change can invigorate an organization.

"It feels like the right time for change at the top of the house," he said. "It's wonderful to be in my position and to feel as good about this as I do."