With the company's 2008 10-K officially filed with the Securities and Exchange Commission, The Ryland Group CEO Chad Dreier not only closed a chapter on a year but also on his 15-year career with the California-based home building company. The company announced Wednesday that effective May 29, 2009, Dreier would retire; COO Larry Nicholson will replace him as chief executive.
In a prepared statement, Bill Jews, lead director on the company's board of directors, said: "We are grateful for Chad's leadership and the many record milestones achieved by Ryland during the 15 years he guided this company as chief executive officer. We look forward to Larry's transition into the role of chief executive officer and his leadership in determining Ryland's future direction as a leading national home builder."
Dreier will stay on as the chairman of the company's board.
A 25-year industry veteran, Nicholson has been with Ryland since 1996. He began his career at Ryland as a vice president of operations for the Greenville, S.C., and Orlando, Fla., division. In 2004, he was promoted to Southeast region president in 2004. More recently, he was promoted to COO in June 2007 and president in September 2008.
UBS Securities housing analyst David Goldberg wrote in a research note this morning, "In our opinion, this was largely expected given Mr. Nicholson's recent promotion to president (9/30/08). Further, given his extensive experience in the industry, and at the company, we expect the transition to be seamless."
Although the handoff had been in motion for some time--following his promotion to COO, Nicholson began taking a more public role, participating in earnings calls and doing road-shows for investors--it still marks the end of an era. Dreier was the face of the company.
Dreier came to Ryland from KB Home, where he had been company CFO. Not only did he take a pay cut, but he inherited a mess of a company. But in white knight fashion, he righted the company and put it on a growth path once again. The pinnacle of his tenure was in 2005, when the company closed 16,673 homes for revenues of $4.8 billion.
The company's success came with some changes to its operations. Most visibly, Dreier altered the way the company purchased land, moving away from an option-only model. Despite the shifts, he kept to the company's core philosophy, remaining focused on maintaining production discipline, a low-risk land strategy, and a people-first corporate philosophy.
In a March 2007 Big Builder article celebrating the company's 40th anniversary, some of Ryland's long-time employees talked about Dreier's influence on the company.
Maurice Simpkins, former president of the company's Baltimore division and 35-year Ryland veteran, said, "Chad [Dreier] brought us into the modern era of home building."
To that, John Meade, the current Baltimore division president and 27-year Ryland veteran, added, "I think Chad Dreier is a very dynamic personality...He's the guy who walks in a room and lights it up. There's a bond between employees and Chad. Those of us saw him join the company at a very tough time and watched him stick by his ideas and strategies. That was a huge challenge, and it paid off for him. In the end, he was right."