Hancock Holding Co. in Gulfport, Miss., raised some eyebrows last week when it appointed two chief executive officers to replace its retiring CEO, but company officials insist the move merely embodies its team approach to managing.
The $6.2 billion-asset Hancock announced Dec. 19 that George Schloegel, its CEO since 2000, had relinquished the post and is now chairman of the board. It said that two executives, chief financial officer Carl J. Chaney and chief operations officer John M. Hairston, had been named CEOs.
Some observers were skeptical of the arrangement.
"We are concerned that the co-CEO concept could prove to be dysfunctional if the gentlemen would like to proceed in different directions," Andrew Stapp, an analyst at Cohen & Co. in Philadelphia, wrote in a Dec. 21 research note.
Mr. Stapp said Thursday that he has spoken with buy-side firms that have expressed similar opinions regarding the management change.
But Mr. Chaney and Mr. Hairston dismissed such concerns, arguing that the dual CEO structure merely formalizes Hancock's long-running practice of managing through partnerships. Though Mr. Schloegel, 65, held the CEO title solely, he ran the company as an equal partner with president Leo Seal Jr., they said. Mr. Seal, at 81, remains president.
"We're stepping into the role that Leo and George have had before us in leading the company … , so it's not really any different for this company," Mr. Chaney said. "We wanted to make sure that the company continues to operate just as efficiently as it has been; that's why we have the two CEOs."
They said they are not co-CEOs but rather two CEOs who could function independently.
"The board was very specific and very adamant that we were not going to have a situation of co-CEOs," said Mr. Chaney, 45. "But rather we were going to both be separate and distinct - simply two CEOs running the company."
Mr. Hairston, 43, said the two-CEO structure would let the company function more efficiently.
"If a decision needs to get made, I have complete confidence and trust in Carl to make that decision when I'm not here or if I am here, and vice versa," he said. "So the end result is, when we have an issue come up, it's really whoever you can grab first."
Other analysts agreed that the dual structure has been a Hancock characteristic.
"George Schloegel and Leo Seal, for all intents and purposes, have been running that bank as partners for quite some time," said J. Corey Shipman, an analyst at Stanford Financial Group. "So it's almost an extension of what has been going on at the company for quite a while; only now, title-wise, it's official."
Peyton N. Green, an analyst at First Horizon National Corp.'s FTN Midwest Securities Corp., said: "George Schloegel has consistently over the years fostered an environment that's really built on teamwork and basically sacrificing the individual good for really the greater good for the company. I think this is an announcement that really personifies that to a T."
Mr. Schloegel spent his entire banking career at Hancock and its subsidiary, Hancock Bank. He started as a mailroom runner while in high school and became the sixth president in the bank's history in 1990. In becoming chairman of the holding company, he succeeded Joseph F. Boardman Jr., who remains a director.
Mr. Chaney and Mr. Hairston have been affiliated with the company for nearly 20 years and have worked together for years. Mr. Chaney, a lawyer, was Hancock's counsel on mergers and acquisitions and Securities and Exchange Commission issues before joining the company full-time in 1998.
Mr. Hairston, meanwhile, worked with Hancock as a financial consultant at Andersen Consulting before joining the company in 1992.
