- After about 22 years in the position
- Accolades and praise for DePaolo
- Eric Howell taking over
- DePaolo spoke at length and said 136 words
(exechange) — New York, February 16, 2023 — Joe DePaolo, chief executive of Signature Bank, is set to leave his position. As announced by Signature Bank in a news release on Thursday, February 16, 2023, Joseph J. (Joe) DePaolo will leave his post as chief executive officer at the full-service commercial Bank, after about 22 years in the role, effective once he completes his transition into a newly created advisory role during 2023.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.4 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.
Joe DePaolo’s duties as CEO will be taken over by Eric R. Howell, currently Chief Operating Officer at Signature Bank.
“Succession plan”
Joe DePaolo’s planned departure from the CEO post is explained as follows. Signature Bank stated: “This succession plan is an integral part of a long-standing commitment by the Board of Directors to ensure Signature Bank’s distinctive business model continues to thrive and differentiate without interruption. DePaolo, along with colleagues Vice Chairman John Tamberlane and Chairman of the Board Scott Shay, co-founded Signature Bank in 2001. DePaolo has held the role of President and Chief Executive Officer since that time.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (25.9% of cases), implementation of a planned succession (16.2%) and the statement that the time was right for a change (9.7%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.6% of cases), personal reasons (3.2%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.8%), disagreement (1.2%), the desire for more time with family (0.9%) and death (0.9%). Sometimes, more than one reason was given. In 30.6% of cases, no reason was given.
Precise information regarding Joe DePaolo’s future plans was not immediately available.
“Transition”
Signature Bank said: “Co-founder, President and Chief Executive Officer Joseph J. DePaolo plans to transition into a senior advisor role during 2023. Chief Operating Officer Eric R. Howell will succeed DePaolo as President, effective March 1, 2023. DePaolo retains the Chief Executive Officer role and also will remain on the Bank’s Board of Directors. In addition, Howell will continue serving as Chief Operating Officer and a member of the Board of Directors. Once DePaolo gradually completes his transition into this newly created advisory role, Howell will also be named Chief Executive Officer at that time.”
Share price decline since February 2022
The announcement follows a decline in Signature Bank’s share price of 58% since February 2022.
In the position of CEO since 2001
Joe DePaolo became CEO of the Company in 2001.
Joseph J. DePaolo has been President and Chief Executive Officer and a Director of Signature Bank since its inception.
He has also served as a Director of Signature Securities Group since its inception and served as its Chairman of the Board until December 2006.
Prior to joining Signature Bank, DePaolo was a Managing Director and member of the Senior Management Committee of the Consumer Financial Services Division at Republic National Bank, which he joined in 1988.
At Republic National Bank, DePaolo held numerous positions including First Vice President and Deputy Auditor, First Vice President and Senior Vice President of Consumer Banking, Managing Director, Chairman of Republic Financial Services Corporation (Republic National Bank’s retail broker dealer group) and Chairman of Republic Insurance Agency (Republic National Bank’s retail insurance agency).
Prior to joining Republic National Bank, DePaolo was a senior audit manager with KPMG Peat Marwick.
DePaolo is a member of the New York State Society of CPAs.
136 words by Joe DePaolo
In the news release announcing his departure as CEO of Signature Bank, Joe DePaolo received accolades and praise.
In announcing the leadership change, Joe DePaolo spoke at length and said 136 words.
“Blood, sweat and tears”
Joe DePaolo stated: “I have thoughtfully planned my transition and continued involvement with the Bank. To this end, I have spent more time with Eric throughout the past 20+ years than any other person in my circle. Since the transition has been years in the making, I am confident it will go smoothly as the future of the Bank is in Eric’s good hands. With regard to my relationship with Scott and John, I could not have two better partners, who over the years, have also become good friends. We will always be co-founders of this dynamic institution. Together, our blood, sweat and tears made Signature Bank what it is today, and we are very proud of our achievements. While it is a bittersweet time for me, I am excited about the future leadership and direction of Signature Bank.”
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 110 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 340 CEO departures in the Russell 3000 Index evaluated over the past 12 months (February 16, 2022, to February 15, 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 performance issues, time with family 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, health care and consumer staples 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 Signature Bank, 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 Joe DePaolo’s move determined
The Push-out Score regarding Joe DePaolo’s move is explained point by point in the exechange report.
exechange reached out to Signature Bank and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 8.2023 ($).