As you’re reading this, Keith Guericke is sitting on the South China Sea, where the former president and CEO of Palo Alto, Calif.–based Essex Property Trust has been trying out an abbreviated, two-month-long retirement since the end of February. While Guericke admits to a certain amount of personal unease since leaving the CEO post on Jan. 1 (he remains on the board of directors as vice chairman), he is quick to add that, strategically, Essex couldn’t be in a better spot with successor and 24-year Essex veteran Michael Schall at the CEO helm. Let the Philippine sun warm him up to the idea of taking a backseat in leading a $6 billion REIT with 30,072 units across 147 properties in the Western United States. Because from here on out, Schall is more than competent to take care of the shop.
“These kinds of life changes are significant, and I am getting used to it,” Guericke says. “Personally, I’m still getting used to the idea that I’m not the band leader anymore. But corporately, we’ve had an extremely successful transition.”
Credit that seamless transition to a five-year succession plan that saw Schall cross-trained at every C-level position in the company; included the implementation of an anonymous evaluation from the senior executive team; and was staged simultaneously with a behind-the-scenes corporate restructuring initiated in April 2010 that had Schall and Guericke co-occupying the CEO office for the eight months prior to Guericke’s retirement.
Keep in mind, all of this was for a candidate seen by the Essex board of directors as the obvious and natural successor to Guericke. Other than some personality differences—Schall leans more toward the conservative and managerial side of the spectrum, compared with Guericke’s more opportunistic, visionary style—all involved say the two executives are of an exact mind when it comes to Essex’s culture, strategy, and business model.
Even Wall Street immediately applauded the move. In a research letter issued by Newport Beach, Calif.–based Green Street Advisors on the day of Guericke’s retirement announcement, analysts wrote that “Mr. Schall and Mr. Guericke share very similar DNA with respect to how they approach capital allocation, operations, and balance sheet management. As such, we expect little to no change in the operational or strategic direction of the company.”