Dods to retire
as CEO of First
Hawaiian BankThe executive will remain
as chairman of both the bank
and its parent company
Walter A. Dods Jr., who turned a regional Hawaii bank into the state's largest income-generating company, said yesterday he would retire as chief executive officer of BancWest Corp. and First Hawaiian Bank at the end of this year.
Dods, chairman and CEO of the bank and its holding company since 1989, has said for the last couple of years that he was contemplating retirement and was grooming his successors.
The 62-year-old Dods made it official yesterday when Don McGrath, president and chief operating officer of BancWest, was named to succeed Dods as CEO of BancWest, and Donald Horner, president of First Hawaiian Bank, was given the additional title of CEO of the local institution.
"I really accomplished all my goals," said Dods, who will remain chairman of the board. "I've had a great run. I've been CEO 15 years. It's a long time to be CEO, and we've got two great people -- the two Dons -- to run the place."
Dods, who contemplated running for governor in 2002, said he has no thoughts of entering the 2006 race.
"In my retirement, I'll continue to be active," Dods said. "I want to do some teaching. I want to do public service, but most probably not elective public service.
"And I'll continue to try and help young people with their companies, but I don't want to be CEO anymore."
It's not hard to make a case for Dods having earned a break. When he took over First Hawaiian in 1989, the bank earned $57 million a year and had assets of $5 billion. At the end of last year, BancWest had earnings of $436 million. The bank's assets, which stood at $38.9 billion at the end of last quarter, will swell to $45 billion during the third quarter, when the bank's pending acquisition of Fargo, N.D.-based Community First Bankshares Inc. is expected to be completed.
Dods said "there was no defining moment" when he decided to call it quits, "but (it seemed like a good time) after we put the merger together and it went well and we put out our earnings (on Wednesday)," he said.
"Our quarterly earnings are now the largest in the history of Hawaii. It's about triple of any other company," he said.
Dods has firsthand experience with the importance of succession planning. In 1989 his boss at First Hawaiian -- then-chairman and CEO John Bellinger -- died suddenly of a stroke while Dods was attending a business meeting in Budapest, Hungary. In a Star-Bulletin interview 16 months ago, Dods said taking over the bank under those circumstances was "fairly traumatic" because he hadn't been properly prepared. He vowed to himself he would groom the next person to take over in order to ensure a smooth transition.
"I always thought the mark of a good leader was to have the next generation of leadership trained and ready to go and better than the current generation," Dods said yesterday. "I believe that with all my soul. To me the mark of good leadership is, after you're gone, the company is in better shape with the next management team."
McGrath, 55, has been with San Francisco-based Bank of the West since 1980 and negotiated the 1998 merger with First Hawaiian Inc. that created BancWest. McGrath will remain as president of BancWest and add the CEO title.
"Don has been involved in strategy, planning and management of BancWest from the beginning," Dods said. "Nobody is better equipped to lead our company into the future."
Horner, 53, has been at First Hawaiian Bank for 25 years. He began his career as a credit analyst in 1978 and took over as president and chief operating officer of First Hawaiian on Jan. 1, 2003. Dods tagged Horner at the time as First Hawaiian's future CEO.
"He's an outstanding leader," Dods said. "He has been a success in every area of our bank. Don is more prepared to take over as CEO than anyone in our bank's history."
Horner said it's going to take more than one person to replace Dods.
"I don't think one individual can replace Walter," Horner said. "However, we've put together a very seasoned management team that I do believe can replace Walter Dods. And he believes that, because we put the team together together. We have eight senior managers running the bank with an average tenure of 20 years at the bank."
Horner said that besides the qualifications and experience of those managers, they were all born and raised in Hawaii.
"It's a kamaaina management team," Horner said. "It's important to Walter and important to me because we are a local-board bank."
Dods, who joined First Hawaiian in 1968, worked his way through management in every part of the bank. He worked in marketing, consumer loans, auto loans, wholesale lending and retail banking before being named president in 1984 at age 43, one of the youngest presidents in the nation for an institution of its size.
In 2001, French banking giant BNP Paribas purchased the rest of BancWest's stock for $2.5 billion, and BancWest became a wholly owned subsidiary of BNP Paribas. Dods, the state's highest-paid executive last year with a compensation package of $2.52 million, was asked to remain with the bank after that transaction, and once again has been asked by BNP Paribas to remain as chairman.
Dods and his wife, Diane, who have been married for 32 years, have three sons, Walter III, 31, Christopher, 28, and Peter, 26; and one daughter, Lauren, 20.
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Banking on changes
Here is a look at the three top executives of BancWest Corp. and First Hawaiian Bank and how their positions will change when Walter Dods retires at the end of this year.Walter A. Dods Jr.: Chairman and chief executive officer of BancWest Corp. and First Hawaiian Bank. He is retiring as CEO of both companies at the end of 2004 but will remain as chairman of both. Age 62.
Don J. McGrath: President and chief operating officer of BancWest and president and CEO of Bank of the West. He will continue as president of BancWest and succeed Dods as CEO. McGrath will remain president and CEO of Bank of the West. Age 55.
Donald G. Horner: President and chief operating officer of First Hawaiian Bank. He will continue as president of First Hawaiian and will succeed Dods as CEO of the bank. Age 53.
