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Bogle rejects board offer
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September 20, 1999: 3:36 p.m. ET
Vanguard Group founder to step down despite waiver of retirement rule
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NEW YORK (CNNfn) - Vanguard Group founder John Bogle has made it clear he still will retire from the mutual fund company's board of directors at the end of the year, despite the board's offer late last week to waive a mandatory retirement rule in order to allow the 70-year-old senior chairman to stay on.
Effective Dec. 31, Bogle will leave the board to become president of a new Vanguard think-tank, Bogle Financial Markets Research Center, which will analyze issues affecting the financial markets, mutual funds and investors.
Bogle's prompt rejection of the board's offer, despite his comments in recent weeks indicating that he would like to remain active on the board, has led some to interpret the board's move as cosmetic in order to gloss over what had resulted in an embarrassing public tiff over Bogle's retirement, the Wall Street Journal reported Monday.
News of his resignation, first announced in August, raised speculation that Bogle was pushed out because of differences over future growth with chief executive John Brennan, the protégé Bogle groomed for years and hand-picked to replace him.
The board's offer -- made upon Brennan's recommendation -- and Bogle's refusal of it "manages to make it look sweet for everybody," Dan Wiener, editor of an independent Vanguard newsletter, told the Journal. "In a horse-trading situation, you can trade an agreement to retire with an agreement to put a gloss on the matter. To think that there wasn't a quid pro quo going on here is to be naïve."
Vanguard spokesman John Woerth declined to comment when asked if the board waived its policy for Bogle in exchange for his agreement to step down.
"I'm not privy to board discussion," Woerth told the paper.
Bogle, who attributed the board's retirement waiver to an outpouring of support for him by Vanguard clients after the board initially indicated they would not make an exception for him, told the Journal, "I knew if the board was gracious to me, I'd respond with similar grace. Board membership isn't that important to me, and this was the most peaceful, decent thing to do."
Whatever machinations may have been in play, mutual fund analysts have predicted investors will not see much change as a result of Bogle's resignation. They praised Bogle for his outspokenness on issues and said the company has embraced his beliefs about the importance of low costs and long-term investing.
Vanguard said in a statement that its board has no plans at present to fill the vacancy created by Bogle's departure. 
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