- After about eight years in the position
- Praise, thanks and good wishes for Stein
- Andy Power taking over
(exechange) — Austin, Texas, December 13, 2022 — Bill Stein, chief executive of Digital Realty, leaves his position. As announced by Digital Realty Trust Inc. in a news release and in a regulatory filing published on Tuesday, December 13, 2022, A.William (Bill) Stein leaves his post as chief executive officer at the data center REIT, after about eight years in the role, effective immediately.
The average tenure of CEOs who announced their departure over the past 12 months was 8.3 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
Stein leaves the company effective December 31, 2022.
Bill Stein’s duties as CEO will be taken over by Andrew P. (Andy) Power, most recently President and Chief Financial Officer at Digital Realty Trust Inc.
It is a generational change. Andy Power is about 26 years younger than Bill Stein.
Power will remain President of Digital Realty and will continue to serve as CFO, with plans to announce a permanent successor in early 2023.
“Strong track record of execution”
Digital Realty did not give an explicit reason for Bill Stein’s departure from the CEO post. Chairman Mary Hogan Preusse said: “Andy has a clear vision for the Company’s future and a strong track record of execution.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.2% of cases), implementation of a planned succession (16.5%) and the statement that the time was right for a change (8.5%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.7% of cases), personal reasons (3%) and conduct issues (2.4%). Rather rarely stated reasons are health problems (2.1% of cases), career change (2.1%), the desire for more time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.2% of cases, no reason was given.
Precise information regarding Bill Stein’s future plans was not immediately available.
Digital Realty said: “CEO A. William Stein has departed from his role as CEO and resigned from the Board of Directors.”
Digital Realty further said: “Also on December 13, 2022, the Board approved the termination of A. William Stein as Chief Executive Officer of the company without cause, effective immediately.”
Share price decline since December 2021
The announcement follows a decline in Digital Realty Trust Inc.’s share price of 33% since December 2021.
In the position of CEO since 2014
Bill Stein became CEO of the Company in 2014.
Stein will remain with the Company through year end.
In connection with Stein ceasing to serve as Chief Executive Officer, Stein resigned as a member of the Board, effective as of December 13, 2022.
Stein will remain an employee of the company through December 31, 2022.
A.William Stein has served as the Company’s Chief Executive Officer and as a director since November 2014.
Stein has over 30 years of investment, financial and operating management experience in both large company environments and small, rapidly growing companies.
Prior to joining the Company, Stein provided turnaround management advice to both public and private companies.
Stein also practiced law for eight years, specializing in financial transactions and litigation.
- Interim Chief Executive Officer of the Company from March 2014 to November 2014.
- Chief Financial Officer of the Company from July 2004 until April 2015.
- Chief Investment Officer of the Company from July 2004 until April 2014.
- Co-Head of VentureBank@PNC and Media and Communications Finance at The PNC Financial Services Group.
- President and Chief Operating Officer of TriNet Corporate Realty Trust, a real estate investment trust, that was acquired by Starwood Financial Trust (now called iStar Financial).
- Executive Board of the National Association of Real Estate Investment Trusts (Nareit) since November 2015.
- Chairman of Nareit in 2020; Co-Chair of Nareit Dividends through Diversity, Equity & Inclusion CEO Council.
- Member of the Pennsylvania Bar Association and The Florida Bar.
No statement by Bill Stein
In the news release announcing his departure as CEO of Digital Realty Trust Inc., Bill Stein received praise, thanks and good wishes.
The announcement of the leadership change does not include a statement by Bill Stein.
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 109 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5, according to exechange data.
32% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 328 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 13, 2021, to December 12, 2022), the average Push-out Score was 5.6, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 32% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, three in 10 departing CEOs were forced out or fired.
Pressure in the real estate sector well below the critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, consumer staples and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, industrials and financials sectors, as measured by average Push-out Scores.
In the real estate sector, which includes Digital Realty Trust Inc., the average Push-out Score over the past 12 months was 3.5, which is well below the critical threshold of 5.
Nevertheless, even in this sector, some CEOs were compelled to leave their posts under what appeared to be severe stress. In the real estate sector, three exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were most likely forced out or faced strong pressure to step down.
Push-out Score for Bill Stein’s move determined
The Push-out Score regarding Bill Stein’s move is explained point by point in the exechange report.
exechange reached out to Digital Realty and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 51.2022 ($).