Published on April 5th, 2016 |0
Man who relocated Pulte Group to Buckhead pushed out as CEO
PulteGroup CEO Richard Dugas, 50, announced Monday he will retire in May 2017 as part of the company’s accelerated succession plan and a board of directors will start a search for his replacement.
Dugas not only engineered PulteGroup’s move to Buckhead from Detroit, but he has quickly become involved in civic activities in Atlanta. The move apparently contributed to a rift between Dugas and the Pulte family.
However, the company is not moving its headquarters out of Atlanta, according to what Bill Pulte III told the Atlanta Business Chronicle Tuesday.
The younger Pulte wanted to clarify the family’s position on Atlanta. “We have been in the Atlanta community since the early 1970s,” Pulte III said. “My grandfather loves Atlanta, and we love Atlanta. We are in Atlanta to stay as the headquarters. In fact, I’m going to be spending more time in Atlanta.”
According to various media accounts, William Pulte, who started the company in Michigan in 1950, is retired but is the biggest individual shareholder with about 9 percent of PulteGroup stock.
In announcing Dugas’ departure plan, the PulteGroup’s board of directors praised his leadership and publicly pointed out the founding family’s role in bringing about the developments.
“Mr. Dugas’ decision to retire is due in part to the actions of Bill Pulte … Mr. Pulte’s grandson, and Jim Grosfeld, who was appointed to the Board in December at the behest of Mr. Pulte,” the company said in a press release.
“These individuals recently demanded an immediate CEO change and a different direction for the company. 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.”
Later Monday, William Pulte issued his own statement in a letter to the PulteGroup board. He wrote that Dugas’ decision to retire in 13 months “falls far short of the short-term leadership change that PulteGroup shareholders and PulteGroup employees need.”
In his letter to the board, Pulte said the Atlanta move “cost the shareholders tens of millions of dollars with no apparent benefit to shareholders.” But he also expressed his “extreme disappointment” in Dugas’ running of the company and “the lack of performance of PulteGroup under his watch.” And he criticized a recent company move to remove Grosfeld from the board.
PulteGroup said it was attracted to Atlanta by the promise of a renewed homebuilding market in metro Atlanta and the Southeast. The company moved or hired about 350 executives and staff to the Capital City Plaza tower in Buckhead, adjacent to the Buckhead MARTA rail station.
The Pulte Group board’s announcement stated Dugas’ “outstanding leadership … positioned PulteGroup to succeed in the future.” The company said pretax profits increased $1.1 billion after
Dugas instituted a “Value Creation” strategy in 2011, and shareholders have seen a 160 percent return in the same period. In 2015, PulteGroup’s profits rose 4.2 percent to $494.1 million.
However, William Pulte’s letter contended company stock “has not appreciated significantly,” during Dugas’ 13 years at the helm. He also said Dugas laid off “key and irreplaceable homebuilding talent.”
PulteGroup is one of 20 Fortune 500 companies based in metro Atlanta. The company’s stock lost about 6.6 percent following Monday’s events.
Dugas has been chairman of the Buckhead-based homebuilder since August 2009 and CEO since July 2003. He joined PulteGroup in 1994. According to the company’s annual proxy filing, Dugas last year got $7.9 million in total compensation, including a $1.2 million salary, $5.1 million in stock awards and $1.5 million in non-equity incentive plan compensation.
Like Pulte Group, the chances are that Dugas may not be leaving the Atlanta area anytime soon. He took a board role with the Metro Atlanta Chamber and played a part in convincing Mercedes-Benz to move its U.S. headquarters to metro Atlanta.
He also is the founding chairman of the Westside Future Fund, a nonprofit that works with Invest Atlanta and the Arthur M. Blank Family Foundation aiding redevelopment of neighborhoods of Vine City, English Avenue and Castleberry Hill around the new Falcons stadium. Dugas is expected to remain its chairman.
Pulte III, CEO of private equity firm Pulte Capital, is also chairman of a family-owned nonprofit called the Blight Authority. He told the Business Chronicle the family intends to establish the Blight Authority of Atlanta.
“It would be a blight removal effort that our family would fund for the knock down of vacant and dangerous buildings in Atlanta,” said Pulte III, who said he has already reached out to the Atlanta community – including Georgia Tech – to replicate what the Authority has done in Detroit.
What are the chances Dugas might end up working together with Blight Authority of Atlanta on some the projects on the west side of Atlanta near the new Falcons stadium?