Amid Downturn, Ryland, Standard Pacific Change Management
February 25 2009 - 6:29PM
Dow Jones News
Amid the worst residential downturn in decades, two
California-based home builders announced executive changes
Wednesday.
After the market closed, Ryland Group Inc. (RYL) said R. Chad
Dreier, 61, will retire as chief executive May 29. President Larry
Nicholson will add the title of CEO. Ryland didn't comment
further.
The news follows a shakeup at Standard Pacific Corp. (SPF) that
replaced its chief financial officer and general counsel.
Such leadership transitions aren't likely to be the last at
builders, which have seen their shares tumble as the widening
financial crisis leaves buyers paralyzed on the sidelines. The Dow
Jones US Home Construction Index has been shaved by nearly half in
the last year.
"My guess is the job of being a home builder CEO is a lot less
fun than it was a few years ago" during the boom, said Rob
Stevenson, an analyst at Fox-Pitt Kelton. The barrage of grim
statistics, quarterly losses and job cuts "would wear on you after
a while."
Dreier, who will continue as Ryland's chairman, joined the
company in 1993 as president and chief executive and added the
title of chairman a year later. He is respected for his sense of
humor and willingness to answer tough questions.
Nicholson, who first joined Ryland in 1996 as vice president of
operations, also served as president for the Southeast region in
2004 before being promoted to chief operating officer in 2007 and
president last September.
"It's going to be an interesting transition at this point in
time. Chad Dreier was a dynamic guy. Nicholson's a little lower
key," Stevenson said. "Its going to fall on him to be the guy who
goes out and rallies the troops."
Earlier Wednesday, Standard Pacific named John M. Stephens chief
financial officer and John P. Babel general counsel and secretary.
Both are company veterans, who replace Andrew Parnes and Clay A.
Halvorsen, respectively, who both resigned.
The builder cited a change of control agreement triggered when
MatlinPatterson Global Advisers LLC, a private equity firm,
invested more than $575 million in the company last year. Parnes
and Halvorsen cited those agreements when leaving and company
officials settled, executives said in an interview.
Vicki Bryan, an analyst at Gimme Credit, pointed out the
contrasting departures.
Ryland "is a more orderly, well-executed transition ... which is
critically important these days to skittish investors," she said.
"There is plenty of time for the change at Ryland to occur, the old
guard will remain in a key capacity, and the new man is a known
commodity who is ready and waiting."
So far this year, Ryland's stock has fallen 10.13%, compared
with Standard Pacific's 44% plunge.
Wednesday, Ryland's shares saw a 5.98% decline, while Standard
Pacific closed down 9.09%. The index ended the day with a 2.07%
drop.
-By Dawn Wotapka, Dow Jones Newswires; 201-938-5248;
dawn.wotapka@dowjones.com
(John Kell contributed to this report.)