PulteGroup Founder Vs. Current CEO: The Saga Continues

Sares of PulteGroup, Inc. PHM were relatively unchanged on Monday despite the ongoing saga between the company's founder and its current CEO.

Bill Pulte, PulteGroup's founder, former chairman and ex-CEO penned a letter to the company's board of directors in which he displayed his "extreme disappointment in the leadership of CEO Richard Dugas and the lack of performance of PulteGroup under his watch."

Related Link: PulteGroup Founder On Recently-Fired CEO: Extreme Disappointment, Inadequate Performance

Dugas has since announced he will retire from the company as CEO – but only in May 2017.

"In my opinion, for the Board of Directors to even consider letting Richard Dugas stay another year as a lame duck CEO puts the personal interests of Richard Dugas ahead of the interests of the company and works to the detriment of the shareholders, the employees, and our customers, who are watching a board protect a failed CEO," Pulte wrote in a new letter delivered to the company's board on Monday.

"In my 66 years of involvement with Pulte, I have never experienced a CEO like this," Pulte added.

Pulte followed up with four points in which he blasted Dugas' "Value Creation Strategy" with a common theme:

• 1) Under Dugas' leadership, PulteGroup's stock has remained nearly flat with "no value creation for our shareholders"
• 2) There has been "no value creation" throughout Dugas' 12 years as CEO
• 3) There is "no value creation" from the company's sales that have fallen from $9 billion to approximately $5.98 billion
• 4) There is "no value creation" for shareholders as the company cumulatively lost more than $530 million over the past 12 years

"I supported the appointment of Richard Dugas as CEO in 2003, which in hindsight was a mistake and perhaps the biggest mistake of my career," Pulte argued.

Company Responds

A spokesperson for PulteGroup issued a response following Bill Pulte's letter, criticizing the company's founder's attempt to "destabilize the company's leadership and derail our successful value creation strategy through their public statements."

The company's response pointed out that Pulte's letter "bear little resemblance to the facts" as the company has generated $2.2 billion in pre-tax income since 2011, including $816 million in 2015. At the same time, the company has been successful in reducing its debt-to-capital ratio and returning $559 million to shareholders through dividends and stock repurchases.

"The PulteGroup Board and management team will continue to stay focused on delivering on the successful strategy it has been executing since 2011," the brief response concluded.