- After 25 years in the position
- Accolades, praise and thanks for Wehmer
- Tim Crane taking over
- Wehmer will remain as Executive Chairman at Wintrust
- Wehmer spoke at length and said 147 words
(exechange) — Rosemont, Illinois, January 30, 2023 — Ed Wehmer, chief executive of Wintrust, leaves his position. As announced by Wintrust Financial Corp. in a news release and in a regulatory filing published on Monday, January 30, 2023, Edward J. (Ed) Wehmer leaves his post as chief executive officer at the financial holding company, after 25 years in the role, effective April 30, 2023.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.5 years. Around 8% of CEOs left their posts after more than 20 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.
Ed Wehmer’s duties as CEO will be taken over by Timothy S. (Tim) Crane, currently President at Wintrust Financial Corp.
“Result of a rigorous multi-year succession planning process”
Ed Wehmer’s departure from the CEO post is explained as follows. H. Patrick Hackett Jr., Chairman of the WTFC Board of Directors, stated: “Today’s announcement represents the result of a rigorous multi-year succession planning process conducted by the Wintrust Board of Directors and Mr. Wehmer. This marks the implementation of our comprehensive CEO transition plan, developed in close collaboration with current executive leadership, that we believe will ensure the necessary levels of continuity and provide all stakeholders with continued confidence in Wintrust’s future.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.2% of cases), implementation of a planned succession (15.6%) and the statement that the time was right for a change (9.3%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.7% of cases), personal reasons (3%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.8%), death (0.9%), the desire for more time with family (0.6%) and disagreement (0.6%). Sometimes, more than one reason was given. In 31.1% of cases, no reason was given.
Wehmer will remain as Executive Chairman at Wintrust
Wintrust stated: “Subject to nomination and reelection by WTFC shareholders at the WTFC annual meeting, Wehmer will continue to serve on the Wintrust Board of Directors and will assume the role of Executive Chairman through May 23, 2024. Wehmer will then serve as Founder and Senior Advisor through December 31, 2026. ”
“Resign”
Wintrust said: “Mr. Crane will succeed Edward J. Wehmer, who will resign as Chief Executive Officer of the Company and assume the position of Executive Chairman of the Board as of the Effective Date [May 1, 2023].”
Generally, resignations are seen as formally voluntary departures. Still, CEOs may also be pressured to resign. In fact, 77% 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.
Share price increase since January 2020
The announcement follows an increase in Wintrust Financial Corp.’s share price of 27% since January 2020.
In the position of CEO since 1998
Ed Wehmer became CEO of the Company in 1998.
To ensure a smooth leadership transition, Edward J. Wehmer will continue to serve as Founder and Chief Executive Officer of Wintrust through April 30, 2023.
Wehmer, a founder of the Company, served as President and Chief Executive Officer of the Company from May 1998 to February 2020, at which point he was named Founder and Chief Executive Officer.
Prior to May 1998, he served as President and Chief Operating Officer of the Company since its formation in 1996.
He served as the President of Lake Forest Bank from 1991 to 1998.
He serves as an Advisory Director of each of the Company’s main operating subsidiaries.
Wehmer is a certified public accountant and earlier in his career spent seven years with the accounting firm of Ernst & Young LLP specializing in the banking field and particularly in the area of bank mergers and acquisitions.
Wehmer serves as Lead Independent Director on the board of directors of Stepan Company (NYSE), a chemical manufacturing and distribution company.
He also serves as a director of the Catholic Extension Society, on the audit committee of Northwestern Memorial Health Care, as a trustee for Ann & Robert H. Lurie Children’s Hospital and Foundation, as chair of Northwestern Memorial Hospital Foundation, and as the vice chairman of the Finance Council of the Archdiocese of Chicago.
147 words by Ed Wehmer
In the news release announcing his departure as CEO of Wintrust Financial Corp., Ed Wehmer received accolades, praise and thanks.
In announcing the leadership change, Ed Wehmer spoke at length and said 147 words.
“Tim’s fingerprints all over it”
Ed Wehmer stated: “We hired Tim to join our executive team in 2008 and promoted him to President of the Company three years ago. Much of Wintrust’s success in the past 15 years has Tim’s fingerprints all over it. He has been an extraordinary partner to me and brings the expertise, the experience and the values Wintrust needs to the CEO position. I am confident that now is the right time to pass the torch to Tim. The last 31 years have exceeded my wildest expectations when I and a few brave hearted colleagues opened the first bank in 1991. I am grateful for the opportunity to have created something special at Wintrust – a true community bank which has flourished due to our relentless focus on serving our customers and our communities. I look forward to supporting Tim in his new role and will continue to support Wintrust’s continued growth.”
Over the past 12 months, 25% 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 510 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.
35% 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 334 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 30, 2022, to January 29, 2023), the average Push-out Score was 5.8, 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 35% 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 financials 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 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, utilities and financials sectors, as measured by average Push-out Scores.
In the financials sector, which includes Wintrust Financial Corp., 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 financials sector, 11 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 Ed Wehmer’s move determined
The Push-out Score regarding Ed Wehmer’s move is explained point by point in the exechange report.
exechange reached out to Wintrust and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 6.2023 ($).