T. Rowe Price Group CEO Bill Stromberg will retire in December after 35 years at the Baltimore-based money management firm.
Rob Sharps, a 24-year veteran of the firm, will become president and CEO on Jan. 1 and take over as chair of the management committee, the company announced Thursday. Sharps serves as the firm’s president, head of investments and group chief investment officer as well as a member of the firm’s management committee. Sharps also will join the board of directors.
“Bill has been a remarkable leader and highly effective CEO,” said Alan D. Wilson, T. Rowe Price’s lead independent director, in the announcement. “He has deftly navigated the firm through a period of significant change and disruption in the industry. ... Bill has fostered a culture that continues to differentiate us in the marketplace and is central to our long-term success.”
Sharps called Stromberg’s contributions to clients, employees and stockholders “truly extraordinary” and said his leadership will have a long-lasting impact.
“I am honored to be the next CEO of T. Rowe Price and am grateful for the confidence that both Bill and the board have placed in me,” Sharps said in the announcement.
The company announced succession plans Thursday morning as it reported strong second-quarter financial results driven by broad growth in global stocks for a fifth straight quarter after coronavirus-pandemic-induced declines in last year’s first quarter. T. Rowe Price said revenues rose 36.3% to $1.93 billion, while earnings rose 35.7% to nearly $816 million, or $3.46 per share. Assets under management increased to $1.62 trillion during the second quarter.
Shares of T. Rowe Price rose $1.10 to close Thursday at $203.95 each.
Under Stromberg’s leadership, the firm has invested heavily in its investment, distribution and product departments, Wilson said, helping the company take advantage of strong markets to grow assets under management, revenues, earnings and dividends. Stromberg became president and CEO in January 2016.
T. Rowe Price broke into the Fortune 500 for the first time this year, joining Sinclair Broadcast Group and McCormick & Co. as the first Baltimore-area companies to earn spots on the list since 2012. T. Rowe Price ranked 447th.
Stromberg guided the investment firm during a period when technology changed the way clients invest. Portfolio managers had to compete with the popularity and growth of lower-fee index investing, for instance. Clients who once turned mostly to mutual funds now look for a variety of investment products.
“Our industry has become more global as well,” Stromberg said in an interview, requiring firms to invest internationally and access international clients.
Stromberg joined T. Rowe Price in 1987 as an equity investment analyst after serving as a summer intern the previous year. He previously worked for Westinghouse Defense as a systems engineer. He will step down as chair of the board and chair of the firm’s management committee but will continue to serve on the board as nonexecutive chair.
Sharps became president in February, and his appointment as CEO is part of a planned succession, Wilson said, calling him “the right leader to guide T. Rowe Price through its next chapter of growth.”
“He is broadly respected and admired by his peers as a clear strategic thinker who quickly gets to the heart of issues, thinks through solutions, and brings out the best in his teams,” Wilson said.
Stromberg expressed confidence in his successor, saying T. Rowe Price “could not be in better hands.”
Sharps, who joined T. Rowe Price in 1997 as an equity analyst, has taken a more active role in corporate strategy, product development, key client relationships and other initiatives in recent years, the company said. He previously was co-head of global equity, the longtime portfolio manager of the U.S. large-cap growth equity strategy and portfolio manager of the former U.S. Growth & Income Equity Strategy, which is now U.S. Large-Cap Core Equity Strategy.
Sharps said during a call with analysts that he plans to continue the company’s previously announced growth strategies.
“In terms of priorities, investment performance for us will always be job one,” Sharps said. “There shouldn’t be any changes in the firm’s strategy. The succession plan here is designed for continuity and stability for our clients and our associates.
Growth strategies include the planned launch in next year’s second quarter of T. Rowe Price Investment Management, a separate investment advisement platform with its own portfolio managers and analysts; broadening opportunities for socially responsible investing and transforming the retirement plan services business through a recently announced partnership with global technology firm FIS.
Building a global investment platform, as it has in the Asia/Pacific region, will continue to be a priority as well, with opportunity for growth in markets such as Germany, Italy, Spain and the United Kingdom, Sharps said.
Sharps said the firm’s approach to potential mergers or acquisitions will continue to prioritize potential partners that are culturally aligned and offer new capabilities or could add expertise, resources or distribution reach.
The firm has evaluated such deals, “but it’s not something we have to do,” Sharps said in an interview. “I feel good about our prospects organically.”
The firm also announced additional management changes Thursday, including the departure as of the end of this week of chief financial officer Céline Dufétel, who also serves as chief operating officer and treasurer. Dufétel has accepted a leadership role with a financial technology company, T. Rowe’s announcement said.
Jen Dardis, currently head of finance, will become CFO and treasurer and join the management committee, effective Aug. 1. Robert Higginbotham, head of global distribution, will take on Dufétel’s COO responsibilities on an interim basis.
T. Rowe Price announced plans in December to relocate its headquarters out of its East Pratt Street high-rise to a pair of new “green” office buildings a mile away in Harbor Point.
“The opportunity to design and build a global headquarters that suits our associates needs is attractive to us,” Sharps said Thursday. “It’s a great site. It’s important to us we remain committed to Baltimore.”