Stagnant growth has led PulteGroup CEO Richard J. Dugas Jr. to accelerate a planned retirement
It seems that PulteGroup’s founder, William J Pulte, is trying to take the company in a different direction than the one his CEO, Richard J. Dugas Jr., has been pursuing.
These competing directions and what Pulte called in a letter to board members a “lack of performance and repeated bad decision-making” on Dugas’ part has ultimately led to Dugas agreeing to step down from his position, The Wall Street Journal reports. Dugas, however, said Pulte, Pulte’s grandson, and a recently appointed board member (former Pulte CEO James J. Grosfeld) demanded his immediate resignation.
Much of this dispute has most likely been brought on by the fact that PulteGroup’s revenue and earnings have trailed other major home builders throughout the housing recovery and Dugas and Pulte disagree about how aggressively the company should be pursuing growth.
Among the grievances with Dugas' work as CEO is a 2014 move from Bloomfield Hills, Mich. to Atlanta, a move that William J. Pulte, the founder’s grandson, said in an interview led to the loss of “irreplaceable home building talent.”
Currently, Dugas is scheduled to step down from his position in May 2017 and a board committee has been formed to find a replacement CEO. This public squabble has already been affecting PulteGroup shares as they fell almost 7 percent to $17.21 on Nasdaq.
PulteGroup’s 2015 deliveries were essentially flat from the previous year while one of its main competitors, Lennar Corp., experienced a 15 percent increase. However, in January the company did report earnings and revenue for the fourth quarter that were better than expected as orders and closings rose.