Two california builders change their donkeys!
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- 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.)
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