- After about four and a half years in the position
- No successor named
(exechange) — Wellesley, Massachusetts, April 14, 2023 — Scott Requadt, chief executive of Talaris, leaves his position. As announced by Talaris Therapeutics Inc. in a regulatory filing published on Friday, April 14, 2023, Scott Requadt leaves his post as chief executive officer at the cell therapy company, after about four and a half years in the role, effective May 26, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 7.8 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.
Talaris did not name a permanent replacement for the position of Chief Executive Officer.
Scott Requadt’s move coincides with a management shake-up also involving the positions of Chief Medical Officer; Chief Technology Officer; and Chief Human Resources Officer.
On February 16, 2023, Talaris had announced a reduction in force as part of its efforts to execute on its evaluation of strategic alternatives and in order to extend its resources. The initial phase of this reduction in force was substantially completed by February 28, 2023 and resulted in the termination of approximately one-third of the Company’s employees.
On April 14, 2023, the Company’s Board of Directors approved and on April 14, 2023, the Company announced a further reduction in force (the “April Reduction in Force”) that is expected to result in the termination of approximately 80 additional employees, or approximately 95% of the Company’s remaining workforce.
“To pursue new opportunities”
The management change is explained as follows. Talaris stated: “In connection with the April Reduction in Force, the following members of the Company’s executive team will be leaving the Company to pursue new opportunities: (i) Scott Requadt, President and Chief Executive Officer, effective May 26, 2023; (ii) Nancy Krieger, Chief Medical Officer, effective April 28, 2023; (iii) Michael Zdanowski, Chief Technology Officer, effective April 28, 2023; and (iv) Andrew Farnsworth, Chief Human Resources Officer, effective May 26, 2023.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.5% of cases), implementation of a planned succession (16.8%) and the statement that the time was right for a change (9.8%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6% of cases), personal reasons (3.8%) and conduct issues (2.2%). Rather rarely stated reasons are health problems (1.6% of cases), disagreement (1.3%), death (1.3%), the desire for more time with family (0.9%) and career change (0.6%). Sometimes, more than one reason was given. In 28.2% of cases, no reason was given.
Precise information regarding Scott Requadt’s future plans was not immediately available.
“Leaving”
Talaris said that Scott Requadt “will be leaving the Company,” effective May 26, 2023.
Share price decline since April 2022
The announcement follows a decline in Talaris Therapeutics Inc.’s share price of 80% since April 2022.
In the position of CEO since 2018
Scott Requadt became CEO of the Company in 2018.
The Company plans to enter into a strategic advisory agreement with Requadt that will, among other things, provide compensation to him, in an amount and on terms yet to be determined.
Scott Requadt has served as the Company’s President and Chief Executive Officer and as a member of the Company’s board of directors since November 2018.
Requadt has over 19 years of operating and investment experience in the biopharmaceutical industry. Requadt was most recently a Managing Director of Clarus Ventures, LLC (“Clarus”) (acquired by The Blackstone Group Inc. (“Blackstone”) in 2018), where he was an investment professional from September 2005 to October 2018, and a venture partner of Blackstone from November 2018 to December 2020, where he sourced, led and managed multiple investments for Clarus spanning therapeutics, medtech and diagnostics.
He currently serves on the board of directors of ESSA Pharmaceuticals, Inc. (Nasdaq: EPIX) and has previously served on the board of directors of Avrobio, Inc. (Nasdaq: AVRO), VBI Vaccines, Inc. (Nasdaq: VBIV) and TyRx, Inc.
Prior to joining Clarus in September 2005, Requadt was Director, Business Development of TransForm Pharmaceuticals, Inc. (“Transform”) from 2001 until it was acquired by Johnson & Johnson (NYSE: JNJ) in 2005.
Prior to TransForm, Requadt was an M&A attorney at the New York-based law firm of Davis Polk & Wardwell LLP from 1995 to 1999, where he represented numerous private equity, pharmaceutical and technology clients.
Requadt holds a B.Com (Joint Honors in Economics & Finance) from McGill University, an LLB (JD) from University of Toronto and an MBA from Harvard Business School, where he was a Baker Scholar.
No statement by Scott Requadt
The announcement of his departure as CEO does not include a statement by Scott Requadt.
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 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.
40% 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 316 CEO departures in the Russell 3000 Index evaluated over the past 12 months (April 14, 2022, to April 13, 2023), the average Push-out Score was 6.1, 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 personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 40% 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, two in five departing CEOs were forced out or fired.
Push-out Score for Scott Requadt’s move determined
The Push-out Score regarding Scott Requadt’s move is explained point by point in the exechange report.
exechange reached out to Talaris and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 16.2023 ($).