Berkshire Bank CEO quits with no explanation and a $7.5 million payout
Michael P. Daly spent the past 16 years building Berkshire Bank into the state’s largest independent bank. The pivotal move came last year, when Daly bought Commerce Bank and announced he was moving Berkshire’s headquarters to Boston from its longtime home in Pittsfield.
So it was something of a mystery when parent company Berkshire Hills Bancorp issued a statement early Tuesday morning saying Daly had immediately stepped down as CEO, president, and a director. Succeeding Daly is Richard M. Marotta, who had been senior executive vice president of the parent company and president of Berkshire Bank since 2015.
Berkshire Hills, a publicly traded company, didn’t give a reason for the sudden management change. In its statement, the bank said nice things about Daly and noted that he would be “available to assist in the transition of the CEO role to Mr. Marotta.”
Banks typically telegraph CEO transitions well in advance. A spokeswoman for Berkshire — which bills itself as “America’s most exciting bank” — declined to comment beyond the statement. In a regulatory filing, the company said it signed a separation agreement with Daly, 56, that will pay him $7.5 million.
Berkshire Hills’ shares closed down 1.4 percent to $33.59.
Piper Jaffray analysts led by Matthew Breese said the resignation may have been precipitated by an anonymous letter last month describing the workplace as “toxic” and in dire need of change, Bloomberg reported. The letter was purportedly written by employees and was sent to “analysts, several bank insiders and several prominent members of the community,” Piper Jaffray said.
Marotta, 60, joined Berkshire as executive vice president and chief risk officer in 2010. Before Berkshire, Marotta spent over 20 years at KeyBank.
Berkshire Hills has about $12 billion in assets and 115 branches in Massachusetts, New York, Connecticut, Vermont, New Jersey, and Pennsylvania. Rockland Bank is poised to overtake Berkshire Hills as the largest state-chartered lender in Masssachusetts when it completes its acquisition of Blue Hills Bank.
As part of the changes, Sean A. Gray has been named president of Berkshire Bank. He has been senior executive vice president of the company and chief operating officer of the bank since 2015.
Positive results: Vertex Pharmaceuticals’ stock is up more than 5 percent after the Boston biotech said Tuesday that treatment with a combination of three cystic fibrosis drugs resulted in a statistically significant improvement in lung function for patients enrolled in two pivotal clinical trials. With these positive data, Vertex takes a step closer towards its long-stated goal of marketing new therapies capable of treating 90 percent of the genetic mutations that cause cystic fibrosis. Our STAT colleague Adam Feurstein has more here.
Trump not optimistic on trade deal with China: The president said he expects to move ahead with boosting tariffs on $200 billion of Chinese goods to 25 percent, and suggested he might slap a 10 percent levy on iPhones. (WSJ)
United Technologies to split into three companies: The Conn. conglomerate will break up its main business lines: United Tech (aerospace), Otis (elevators and escalators), and Carrier (heating and cooling equipment). (CNBC)
FDA aims to overhaul medical device approvals: The move came one day after the publication of a media consortium's investigation into injuries and deaths linked to medical equipment. (AP)
Do Trump fans want more validation?: Fox News will find out as it serves up Fox Nation, a new streaming app. (NYT)
Amazon says Cyber Monday was its biggest day ever: Top-selling products included the Echo Dot, AncestryDNA: Genetic Testing Ethnicity, Bose QuietComfort 25 noise-cancelling headphones for Apple devices, "Becoming" by Michelle Obama, Jenga, and Instant Pot DUO60 – 6 Quart. (Amazon)
Off the top
CRISPR controversy: It's not a recipe for KFC or those two drawers at the bottom of your fridge where fruits and vegetables rot. CRISPR is a breakthrough technique for editing genes that holds enormous potential to eliminate devastating genetic disorders.
But it also raises very difficult ethical issues -- and potential dangers -- because CRISPR may allow scientists and doctors to play God by tinkering with the reproductive cells that define us as humans.
That is why the announcement yesterday by a Chinese scientist that he had changed the embryonic DNA of twins drew fire from ethicists and doctors in Mass. and around the world, including from the MIT professor who helped invent the tool.
Here's a primer on what happened, culled almost word for word from this story by the Globe's Jonathan Saltzman and Felice J. Freyer:
■ He Jiankui of Southern University of Science and Technology of Shenzhen said he had used CRISPR to disable a gene that allows HIV to infect cells. He said his team performed “gene surgery” on embryos created from their parents’ eggs and sperm to protect twin girls, Lulu and Nana, from HIV, the virus that causes AIDS. The children’s father is HIV-positive. He's claim has not been independently verified.
■ George J. Annas, director of Boston University’s Center for Health Law, Ethics & Human Rights, called the research “an unethical, premature experiment on human embryos, and done in defiance of the international scientific community.”
■ Since 2015, global researchers have focused on editing disease-causing DNA within the human body’s somatic cells -- those not involved in reproduction. That ensures that any ill effects end with the individual. But the Chinese researchers have leaped into what many consider a dangerous arena, altering reproductive cells, also known as germline editing.
■ Feng Zhang, one of the inventors of CRISPR who teaches at MIT and is a member of the Broad Institute of MIT and Harvard, said he appreciated efforts to curb the global threat of HIV. But he felt the risks of editing the DNA of embryos to make them more resistant to the virus “seem to outweigh the potential benefits.”
■ Two Cambridge biotechs working on CRISPR gene-editing technology, Intellia Therapeutics and Editas Medicine, said that their research is exclusively aimed at editing DNA within the body’s non-reproductive cells.
■ Dr. Barbara Weber, chief executive of Cambridge-based Tango Therapeutics, said she isn’t categorically opposed to gene editing in reproductive cells. If scientists could delete a gene that causes, say, hemophilia, she said, she might support that. What makes the Chinese scientist’s claim troubling, she said, is that He says he edited the DNA to preemptively protect the twins from HIV -- there was no apparent defect to fix.
■ George Church, a prominent geneticist who teaches at Harvard and MIT, said he has been in touch with the Chinese researchers and believes their claims. “It is an enhancement, but in a way similar to vaccines,” he said. “Is the genie really out of the bottle? Yes.”
Legalize (all of) it: Last week, following the opening of the first marijuana stores in Mass., the Globe's Dan Adams started asking people, “What comes next?” Dan says Shaleen Title, one of five members of the state Cannabis Control Commission, had by far the most unexpected response: It’s time, she said in an interview, to talk about the legalization and regulation of all drugs -- not just marijuana.
■ "I understand that might come off as radical if it’s the first time you’re thinking about it," Title said. "But marijuana legalization was radical to people as well in the beginning. If you look at harm reduction measures like Narcan [or naloxone, a medication that reverses opioid overdoses], people used to say that would enable drug users and cause usage to go up. But the data is clear: Prevention and treatment work better than criminalization. Now police officers carry it, and I see ads for how naloxone can save lives. As time goes on and data comes in from marijuana legalization, it will become clear that this isn’t a radical idea. It was prohibition that was radical all along."
Crosstown traffic: Speaking of legalization, the people of Leicester are not happy about it. Can you blame them? After the Cultivate marijuana shop opened there last week -- just one of two legal pot stores in Mass., nay, the whole East Coast -- the town of about 11,000 residents just west of Worcester has been jammed with cannabis consumers and ganja gawkers. At an emergency Town Hall meeting last night, citizens aired numerous complaints: long lines of traffic, closed streets and detours, pedestrians trekking along a highway with no sidewalk, litter, public urination and pot consumption, overly aggressive shuttle bus drivers ferrying customers to and from a nearby parking lot, and poor communication from Cultivate. Town officials and the company promised to address the problems, but there is one important fix that is beyond their control: opening more pot shops around the state to alleviate the pressure on little Leicester and crunchy Northampton. According to the Globe's Dan Adams, who covered the meeting, shops could open in the next month or so in Wareham, Salem, and Easthampton, but it will probably be months before the first shop in Boston opens. (Boston Globe)
Losing hope: When the Central Mass. town of Hopedale lost hope in Philip Shwachman's plans to redevelop a key swath of downtown, it turned to a new partner to move the project forward. Now Shwachman is suing the town to block an urban renewal plan that would allow officials to seize control of 77 acres he owns in the heart of Hopedale. As the Globe's Jon "Chesto Means Business" Chesto explains, the focus of the legal fight is the former Draper Corp. factory, once the town’s primary employer. Shwachman has spent more than $10 million acquiring and cleaning up the properties, where at least 1 million square feet of buildings still stand. After his redevelopment plans were derailed by the Great Recession, town officials moved on. But Shwachman says it just isn't fair that his land could be taken by eminent domain with little or no compensation. Whether the town was too quick to dump Shwachman is a question to be settled in a Worcester courtroom. (Boston Globe)
Upping the ante: R.I. is now the first state in New England to allow betting on professional sports, leaving lawmakers in neighboring Mass. and Conn. with tough decisions about whether to also get in on the action. The first wagers -- many on Monday Night Football and the Celtics -- were placed Monday at the Twin River Casino in Lincoln. The debut comes six months after a US Supreme Court ruling that gives states the freedom to permit sports gambling. One safe bet: The old timers up on Federal Hill in Providence are none too pleased. (AP)
Hedging its bets: While we are on the subject of gambling, Wynn Resorts, which is building a betting palace in Everett, said Tuesday it will donate $10 million to civic and social programs over the next four years in an effort to “help those in need and improve the lives of residents in local communities.” The company will work with Connors Family Office, a charitable organization led by Boston uber-macher Jack Connors Jr., to find worthy recipients. Of course, Wynn Resorts is still waiting to hear whether the state will allow it to keep its casino license after an investigation into how the company handled allegations of sexual assault by Steve Wynn, its founder and former chairman. (Boston Globe)
H.G. Wells and Orson Welles would be amazed: News comes at us at the speed of light, so it's easy to not fully appreciate when something truly extraordinary and wonderful happens. So let's pause for just a moment to consider this: The InSight lander traveled six months and 300 million miles to land on a dime on Mars and almost immediately start sending pictures back to Earth. Who says the US has lost its high-tech edge?
■ Pre-market earnings: Eaton Vance
■ 9 a.m.: S&P CoreLogic Case-Shiller home price indexes (September)
■ 10 a.m.: US consumer confidence index (November)