Family firm CEO steps down, saying he's a creator, not a builder
Saying that he's better equipped to create and build a business than scale it up, Vertex Inc. chief executive Jeff Westphal told his 900 employees Thursday that he would step aside as CEO in favor of the tax software company's executive vice president, David DeStefano.
/arc-anglerfish-arc2-prod-pmn.s3.amazonaws.com/public/RL4DEX3LSZBC3ERQPJ667UTGUU.jpg)
Saying that he's better equipped to create and build a business than scale it up, Vertex Inc. chief executive Jeff Westphal told his 900 employees Thursday that he would step aside as CEO in favor of the tax software company's executive vice president, David DeStefano.
The change will occur in phases, starting Jan. 1, when DeStefano, 52, becomes president and Westphal, 53, takes over as chairman of the Berwyn company founded in 1978 by his father. The following January, DeStefano will become chief executive.
"My strength is creating things," Westphal said in an interview Thursday morning. "David's strength is that he is a natural born overachiever.
Westphal said he oversaw the development of two key aspects of the company's business, the Vertex Enterprise system, and Vertex SMB, which is a tax system designed for small- and medium-sized businesses.
"The company is moving from a creative phase to an achievement phase," Westphal said. "I'm not the best guy to make the most of that. We are going to need someone better to lead for scale."
Vertex's revenues top $185 million and it counts Apple and Starbucks among its 10,000 clients.
While it's fairly common for a family-run business to turn management over to a nonfamily member, experts say, Westphal's candor in explaining his reasoning is unusual.
"It takes a lot of humility," said Meghan Juday, director of the Initiative for Family Business and Entrepreneurship at Saint Joseph's University.
Juday said that companies often turn to outside management when the business gets larger and demands a search for talent that goes beyond the pool of available relatives.
In Vertex's case, no member of the third generation now works for the company and the eldest, now 27, has a career in medicine.
"It's a little unusual to [step aside] when someone's in the prime of his career," said Theodore Hill 3d, who manages the Fox School of Business Management Consulting Group at Temple University.
Hill said that family businesses often put the company in the hands of a competent executive while the next generation gets its bearings. If some members enter the business, they'll need time to become competent enough to lead it.
DeStefano, a graduate of Lehigh University, joined the company in 1999 as chief financial officer and has held a variety of roles since then.
"I'm very excited," he said, adding that he was humbled by the family's decision to place the company in his hands.
DeStefano and Westphal knew each other at Conestoga High School. But Westphal said that DeStefano's appointment to the job was not the old story of a CEO tapping a high school buddy to run the company.
"This five-year planning process was advised by Spencer Stuart, the global consultancy. The decision was made with unanimous support of our independent Board of Directors," he wrote in an email. "David is the consensus choice because he's most qualified for the job."
The company's board is now chaired by Westphal's sister, Stevie Westphal-Lucas, and Westphal's other sister, Amanda Westphal-Radcliffe, also serves on the board. The three siblings are the company's three shareholders, although the board includes nonfamily members.
215-854-2769
@JaneVonBergen