PulteGroup CEO to retire under pressure from homebuilder's founder
By Ankit Ajmera
(Reuters) - U.S. homebuilder PulteGroup Inc PHM.N said Chief Executive Richard Dugas would retire effective May 2017, bowing to a demand from founder and Chairman Emeritus Bill Pulte.
Dugas's decision to retire after nearly 13 years at the helm comes as Pulte is seeking a "different direction" for the No. 3 U.S. homebuilder by home sales, PulteGroup said.
Pulte, however, said the year-long succession plan fell "far short of the short-term leadership change" that the company needs. In a letter to shareholders, he reiterated his "extreme disappointment" in the leadership of Dugas and asked the board to speed up the succession plan.
PulteGroup's shares fell as much as 9.8 percent before closing down 6.6 percent at $17.21.
"In an effort to avoid a contested public battle that would not be in the interests of shareholders, Mr. Dugas offered to accelerate and make public the board's succession plan, prompting today's announcement," the company said earlier on Monday.
PulteGroup, which was the No. 2 U.S. homebuilder until 2014, has been unable to take full advantage of a steady recovery in the nationwide housing market.
The housing market in Texas, PulteGroup's biggest market by home closings in 2015, has been affected by a sharp drop in oil prices.
The company's home sales have also underperformed those of larger rivals D.R. Horton Inc (DHI.N: Quote) and Lennar Corp (LEN.N: Quote), as labor shortages delayed home closings and rising costs hit margins. Continued...