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MBNA veteran Rhodes named new Discover CEO

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Michael Rhodes Discover Bank

Michael Rhodes, a longtime veteran of MBNA, has been named the new president and CEO. | PHOTO COURTESY OF DISCOVER

WILMINGTON – Michael Rhodes, a veteran banking executive who spent more than a decade in the First State earlier in his career, has been named the next president and CEO of Discover Bank.

Currently the head of personal banking in Canada for Toronto-based TD Bank, Rhodes spent more than a decade at MBNA in Wilmington from 1994 to its acquisition by Bank of America in 2006. He served in top executive roles at the former credit card giant, including as chief marketing officer.

After joining Bank of America, he briefly led its Europe Bank division that retained the MBNA name and later its U.S. card operations.

Rhodes has been at TD Bank for 12 years and was viewed by the investment community as a potential successor to current CEO Bharat Masrani, according to Reuters. The Canadian bank named a slate of replacements after Rhodes’ surprise exit on Tuesday.

Rhodes is well-known to the Delaware community as the son-in-law of MBNA co-founder Charles Cawley, who was the driving force for credit card operations job growth in the greater Wilmington area.

Discover Bank logo

Discover Bank traces its roots in Delaware back to the early 1900s. | DBT PHOTO BY MIKE ROCHELEAU

In taking the helm of Discover Bank, Rhodes will lead another banking institution with Delaware roots that trace back more than a century to 1911. The bank’s parent company, Discover Financial Services, acquired the former Greenwood Trust Company in 1985 and converted it into the online bank still in operation today.

Today, the credit giant currently employs more than 1,100 employees in Delaware, primarily based at the Iron Hill Corporate Center near Newark, although a small staff remains at its sole Greenwood branch.

Announced Tuesday morning, Rhodes’ appointment is effective by March 6. Discover declined to say where Rhodes would be based – the parent company’s headquarters are outside of Chicago – but he did work for TD Bank for at least a stretch of his career there while still residing in Wilmington.

Rhodes will replace interim CEO and President John Owen, who has led the company since CEO Roger Hochschild resigned in August. Although a reason was not cited for the resignation, Discover has recently disclosed that it was under regulatory review for incorrectly classifying credit card accounts as well as a separate consumer compliance review by the Federal Deposit Insurance Corporation.

“Michael’s appointment follows a comprehensive search process to identify the right leader to help the Company deliver on its strategic and financial goals. He is an experienced executive and proven leader who has worked in a variety of roles within the payments and banking industry around the globe and has a track record of successfully leading sophisticated financial services operations,” Tom Maheras, chair of Discover Financial Services’ board, said in a statement. “I am confident that under his leadership, Discover will be able to reach its full potential and take care of its customers at the highest industry levels while continuing to advance its commitments to enhancing compliance, risk management and corporate governance.”

Rhodes said that he was “honored to be joining Discover at such an important time for the company and leading its 20,000 employees to deliver on their important mission of helping people achieve brighter financial futures.”

“Throughout my career I’ve developed a clear understanding of what it takes to deliver a great customer experience at every touch point, and I am confident that with its strong foundation and employee-base, Discover is well-positioned to capitalize on the market opportunities ahead. I look forward to working with Tom and the management team and the rest of my colleagues, as Discover continues to advance its culture with a focus on compliance and serving customers while driving sustainable long-term financial performance,” he added in a statement.

While he was in the First State, Rhodes served on the boards of several local nonprofits, including United Way of Delaware, the Boys and Girls Clubs of Delaware, ChristianaCare Health System, the Delaware Symphony Orchestra, and Winterthur Garden Museum and Library.

Rhodes is also a member of the Board of Trustees at his alma mater, Duke University, where he serves along leaders like Apple CEO Tim Cook, General Motors CEO Mary Barra, NBA Commissioner Adam Silver and Illinois Gov. J.B. Pritzker.

According to Discover’s Securities and Exchange Commission filing, Rhodes will earn a base annual salary of $1 million, and be eligible for a short-term incentive bonus up to $2 million and a long-term target of $7 million. He will also receive $1.5 million in compensation to leave TD Bank and a $750,000 payment to transition. Finally, he will receive $7.1 million in restricted stock shares that will vest over the next three years.

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