- After about six years in the position
- Praise and thanks for Czarnecki
- John Moragne taking over
- Czarnecki spoke at length and said 153 words
(exechange) — Rochester, New York, January 11, 2023 — Chris Czarnecki, chief executive of Broadstone, leaves his position. As announced by Broadstone Net Lease Inc. in a news release and in a regulatory filing published on Wednesday, January 11, 2023, Christopher J. (Chris) Czarnecki leaves his post as chief executive officer at the real estate investment trust, after about six years in the role, effective February 28, 2023.
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.
Chris Czarnecki’s duties as CEO will be taken over by John D. Moragne, currently Chief Operating Officer at Broadstone Net Lease Inc.
Chris Czarnecki’s move coincides with a management shake-up also involving the position of Chief Financial Officer.
“Now is the appropriate time”
The management change is explained as follows. Czarnecki stated: “After an exceptional year of operational performance and much thought and reflection, I feel that now is the appropriate time for me to step down to focus more on my personal interests and spend additional time with my family.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.8% of cases), implementation of a planned succession (16.2%) and the statement that the time was right for a change (8.3%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.2% of cases), personal reasons (2.9%) 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%), death (0.9%) and disagreement (0.6%). Sometimes, more than one reason was given. In 30.7% of cases, no reason was given.
Precise information regarding Chris Czarnecki’s future plans was not immediately available.
“Step down/resign”
Broadstone said: “President and CEO Chris Czarnecki will step down from his current role and the Board of Directors upon the effective date but will remain with the Company through January 31, 2024, in an advisory role as part of the planned transition.”
Broadstone further said: “On January 6, 2023, Christopher J. Czarnecki, notified the Board of Directors (the “Board”) of the Company of his decision to resign from his roles as the President and Chief Executive Officer (“CEO”) of the Company, effective February 28, 2023.”
Generally, resignations are seen as formally voluntary departures. Still, CEOs may also be pressured to resign. In fact, 76% of the time “resign” was used in CEO departure announcements over the past 12 months, the departing chief executive received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
“Not the result of any disagreement”
Broadstone stated, regarding the change: “Mr. Czarnecki’s resignation was not the result of any disagreement with the Company.”
Share price decline since January 2022
The announcement follows a decline in Broadstone Net Lease Inc.’s share price of 29% since January 2022.
In the position of CEO since 2017
Chris Czarnecki became CEO of the Company in 2017.
Czarnecki has served as the Company’s Chief Executive Officer since February 2017, and as a member of the Company’s Board of Directors since May 2017.
Czarnecki previously served as the Company’s Chief Financial Officer and as Vice President of Capital Markets.
From 2005 until 2007, Czarnecki was a commercial real estate lender and credit analyst for Branch Banking & Trust Co.
Czarnecki previously served on the board of trustees of Broadstone Real Estate Access Fund from July 2018 through February 2020.
Czarnecki serves on the board of trustees of The Strong National Museum of Play.
Czarnecki holds a B.A. in Economics from the University of Rochester, a Diploma in Management Studies from the Judge Business School at the University of Cambridge, and an M.B.A. in Finance and Corporate Accounting from the Simon Graduate School of Business at the University of Rochester.
153 words by Chris Czarnecki
In the news release announcing his departure as CEO of Broadstone Net Lease Inc., Chris Czarnecki received praise and thanks.
In the announcement of the leadership change, Chris Czarnecki spoke at length and said 153 words.
“To focus more on my personal interests and spend additional time with my family”
Chris Czarnecki stated: “Broadstone has a bright future and John is the clear choice to lead the Company as CEO into the next phase of its growth. I am immensely proud to have been part of such a dynamic team over the past 13 years and to have served as the Company’s CEO since 2017. I am tremendously grateful to have had the opportunity to build BNL into what it is today. After an exceptional year of operational performance and much thought and reflection, I feel that now is the appropriate time for me to step down to focus more on my personal interests and spend additional time with my family. I am confident that the Company will be in very capable hands moving forward into the next chapter. John has been a close colleague and friend of mine for many years, and I look forward to facilitating a seamless transition and supporting the entire team.”
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 108 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short, excessively long 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.
33% 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 339 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 11, 2022, to January 10, 2023), the average Push-out Score was 5.7, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When performance issues, time with family or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 33% 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, one in three departing CEOs were forced out or fired.
Pressure in the real estate sector substantially 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 consumer staples, communication and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, utilities and financials sectors, as measured by average Push-out Scores.
In the real estate sector, which includes Broadstone Net Lease Inc., the average Push-out Score over the past 12 months was 4.3, which is substantially 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, four 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 Chris Czarnecki’s move determined
The Push-out Score regarding Chris Czarnecki’s move is explained point by point in the exechange report.
exechange reached out to Broadstone and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 3.2023 ($).