Digital Realty’s Chief Executive Departs, Replaced by CFOBrian Louis
Digital Realty Trust Inc. said Michael Foust left his position as chief executive officer of the real estate investment trust following a decline in the company’s stock price.
A. William Stein, 60, the company’s chief financial officer and chief investment officer, was named interim CEO, the San Francisco-based data-center company said yesterday in a statement. Digital Realty said it’s hiring a search firm to find a permanent replacement for Foust, 58.
The company’s shares fell 28 percent last year. It announced an accounting change in July, and in October lowered its outlook for 2013 funds from operations. Digital Realty’s stock-market value fell to $6.3 billion at the end of 2013 from $8.5 billion a year earlier.
“We had a disappointing year from a stock-price performance standpoint,” John Stewart, senior vice president of investor relations, said in a telephone interview. There was no wrongdoing on Foust’s behalf, Stewart said. “The departure isn’t as abrupt as it appears from the outside.”
Foust won’t stand for re-election to the board at the company’s annual meeting next month, Digital Realty said. It expects to record a one-time expense of 10 cents a share in the first quarter for Foust’s departure. Foust will be eligible to receive a severance payment of about $6.5 million, as well as other payments and benefits, as part of non-cause termination provisions in his employment agreement, the company said in a regulatory filing yesterday.
Digital Realty disclosed the management change after the close of regular trading yesterday. Its shares rose 2.5 percent to $52.77 yesterday. The company has 131 properties in North America, Europe, Asia and Australia.