First Republic extends CEO's contract, but hints at succession plan
First Republic Bank in San Francisco has once again extended the contract of its longtime Chairman and CEO James Herbert, while also expanding the role of a top executive who could potentially become Herbert’s successor.
The $99 billion-asset private banking and wealth management company said Thursday that Herbert, 73, would remain CEO until Dec. 31, 2021, and serve as executive chairman until the end of 2028.
It marks the fourth time in six years that First Republic has extended the contract of the only CEO in its 34-year history. Most recently, in 2017, the company announced that Herbert would retire as CEO in 2020 and step down as chairman in 2025.
First Republic also announced Thursday that its president, Gaye Erkan, has been appointed to the board of directors, a move that could position the 39-year-old Erkan to replace Herbert when he eventually retires.
The company said in a news release that Erkan’s appointment is “an important next step as we continue our leadership succession plan,” though a spokesman declined to comment further.
At least one analyst said he believes that Erkan is now the leading candidate to replace Herbert.
“Succession planning takes another step forward; Gaye Erkan likely to lead the charge in 2021,” read the headline in a research note Evercore ISI’s John Pancari wrote to clients on Thursday.
Erkan joined First Republic in 2014 as chief investment officer and co-chief risk officer. She was named chief deposit officer in 2016 and was promoted to president in 2017.
If she were to become CEO, Erkan would be one of just a handful of women running a large or regional U.S.-based bank.