The era of co-leadership at Meritage Homes has ended. On May 18, John R. Landon, co-chairman and co-CEO, resigned, permanently destroying the Janus-like face of the nation's 13th largest home builder. Partner Steven J. Hilton will remain in the top seat.
Landon has shared the helm at Meritage since its beginnings in 1997, when Texas-based Legacy Homes, a company he founded in 1987, merged with Monterey Homes.
The official news came one day after the company's annual investor conference, where Hilton predicted that, in spite of slowing housing markets, the home builder will meet its 2006 profit forecast between $11.25 and $11.50 a share, up from $8.88 a share in 2005. Hilton also said the company expects to offset lower orders by expanding its community count.
In a press release, the company gave no official explanation of the break-up, other than to say Landon wanted the opportunity to pursue other business opportunities. However, industry insiders have speculated about the possibility of a personal conflict. “I have seen no indication of any personal tension between them,” disputes Jane Hays, vice president of corporate communications.
Peter Ax, lead director of the Board of Directors says, “We are highly confident in Mr. Hilton's ability to lead the company going forward.”
During Landon's tenure, Meritage experienced a 45 percent compounded annual growth rate in its revenues from 2000–2005 and a 48 percent compounded annual growth rate in its net earnings over the same period.
The effects of the decision are still unknown in the industry, but Hays doesn't expect to see any big, sweeping changes in the company. Under the previous structure, the CEOs split Meritage regions with separate division presidents reporting to each. However, both executives maintained relationships with all managers. “There is no one in our senior management that Steve doesn't know,” says Hays. “He'll be spending a lot of time in the immediate future cementing those relationships.”
Neither Landon nor Hilton was available for comment.