Now former CEO of Digital Realty A. William Stein was terminated, effective immediately, by Digital Realty’s Board of Directors, according to financial documents filed today.
Mr. Stein’s termination is just one in a years-long trend of firings or abrupt resignations among data center company leadership. Two notable and recent terminations or abrupt resignations include:
- Steve Smith, CEO of Equinix for 11 years until the mishandling of an employee matter caused his abrupt resignation in January of 2018.
- Gary Wojtaszek, one-time CEO of CyrusOne, resigned in January of 2020 leading to a spate of changes in C-suite leadership for the firm.
Today, Digital Realty added its name to the growing list of colos with abrupt CEO resignations / terminations. For its part, the firm did issue a press release on the resignation stating Stein will remain an employee of the firm until year-end, which is in 18 days.
Reasons for termination unclear
When asked of the reason for Stein’s termination as CEO, Jordan Sadler, senior vice president of public and private investor relations for Digital Realty told Data Center Knowledge, “Bill was explicitly terminated “without cause” pursuant to his employment contract. This is different from being terminated for cause.”
In a subsequent statement, Sadler said, "I recognize that the word terminated can have a negative connotation, but this is just a function of a contract." He then went on to share details of new CEO Andy Power's rise to Digital Realty's C-suite, having been appointed president of the firm last year.
It is of note that Digital Realty’s official statement did not mention Stein’s termination but rather his departure. But Data Center Knowledge obtained a copy of the firm’s Form 8-K, which is “a mandatory announcement of major events investors should know about,” according to the U.S. Securities and Exchange Commission.
In this document, the triggering event for the filing of the Form 8-K is the announcement of Andrew P. Power as CEO and the termination of A. William Stein as CEO effective immediately.
“… on December 13, 2022, the Board approved the termination of A. William Stein as Chief Executive Officer of the company without cause, effective immediately. In connection with Mr. Stein ceasing to serve as Chief Executive Officer, Mr. Stein resigned as a member of the Board, effective as of December 13, 2022,” reads the firm’s 8-K filing.
A crisis of leadership in colo C-suites
In September, we reported on the appointment of Eric Schwartz as CEO of CyrusOne, making him the fifth CEO of the firm in all of three years.
Schwartz shared his perspective with Data Center Knowledge on Nov. 17 about the firm’s high C-suite turnover following our coverage of his appointment. Here’s some of what he had to say:
“It’s hard for me to say what led to those stages of turnover,” Schwartz told us. “I've been here at CyrusOne now less than two months and my observation is, despite the disruption and turnover, that you very correctly noted, the company has continued to execute well and deliver for customers while experiencing steady revenue growth and investment.”
Until Nov. 2021 we were able to verify and confirm the veracity of Schwartz’s statement. After that point, though, the firm was taken private and isn’t under obligations to publicly state its earnings.
It’s true CyrusOne and its colocation peers enjoy steady profits during uncertain times. As we expand coverage on this topic, Data Center Knowledge will continue to seek answers on whether financial growth equals long-term stability, through consistent top-level leadership, for customers and investors.
More coverage from Data Center Knowledge on Digital Realty leadership changes:
- Digital Realty Names Bill Stein Permanent CEO
- Foust Resigns as Digital Realty CEO, Stein Takes the Helm
Updated on Dec. 14, 2022 at 2:25 p.m. EST to include images of former Digital Realty CEO Bill Stein and current Digital Realty CEO Andy Power Updated on Dec. 14, 2022 at 10:33 a.m. EST with a re-designed chart on CyrusOne's leadership changes. The chart also updates information on CEO Eric Schwartz's tenure at CyrusOne. Updated on Dec. 13, 2022 at 7:42 p.m. EST to include expanded comments from Digital Realty.