(Updates with comments from conference call)
By Nathalie Tadena
HCP Inc. (HCP) fired James Flaherty as its chief executive and
chairman after a decade at the helm of the real estate investment
trust, pointing to a loss in confidence in his leadership style
amid a slew of executive turnover.
HCP, which is focused on the healthcare industry, named Jones
Lang LaSalle Inc. (JLL) executive Lauralee Martin as its new CEO
and said its board decided to separate the chairman and CEO roles
to enhance its governance. It appointed lead director Michael
McKee, who has been on the board for 26 years, as non-executive
chairman.
"This is not about a new direction or a new strategy, but it's
about leadership," Mr. McKee said of Mr. Flaherty's dismissal on a
conference call with analysts.
Mr. Flaherty couldn't immediately be reached for comment and
hasn't responded to an email query.
Mr. McKee said the board realized it had lost confidence in Mr.
Flaherty's leadership and style over a number of months and said
Ms. Martin "checked all the boxes" the board was looking for in a
leader, particularly in regards to her relationship-building
skills.
"I build teams that are high quality teams that can perform at a
much higher level because we perform together," Ms. Martin said on
the call.
Ms. Martin, who is 62 years old, becomes HCP's third CEO in its
28 years as a public company. However, HCP has seen a handful of
management changes in recent years, including four chief financial
officers and three general counsels since Mr. Flaherty became CEO
in 2003.
Ms. Martin has 35 years of experience in real estate and has
served on HCP's board for five years. Prior to her tenure at
commercial real-estate-services firm Jones Lang LaSalle, where she
most recently served as CEO of its Americas division, Ms. Martin
held posts at Heller Financial Inc. and General Electric Co.'s (GE)
credit arm. She will remain on HCP's board.
HCP has generally logged increased revenue in recent periods
thanks in part to acquisitions and higher resident fees. Ms. Martin
said HCP's business is strong and the company's "5x5" business
model, in which it invests in five health care property types
through five investment products, will remain the same.
"We felt that this was actually a good time to make a transition
because of the current strength of the company," Mr. McKee
added.
Mr. Flaherty, who was 55 as of the company's March proxy filing,
will remain a member of the board and will receive a severance
payment. Mr. Flaherty hasn't told HCP's board of his next plans,
Mr. McKee said.
"Jay was a substantial and successful force behind HCP's
considerable growth for more than a decade, and we wish him
continued success," Mr. McKee said in a statement.
Ms. Martin joined Jones Lang LaSalle as chief financial officer
in 2002 and was appointed to the additional post of chief operating
officer in 2005. She gave up her COO responsibilities in January,
and later her CFO responsibilities, to become the CEO of the
Americas segment.
Separately, Jones Lang LaSalle said CEO Colin Dyer will assume
direct oversight of the Americas region following her
departure.
HCP--whose investments include senior housing, medical offices
and skilled-nursing properties--also said Thursday that Kenneth
Roath, the company's chairman emeritus and former CEO before it
went public, plans to step down from the board. Mr. McKee noted Mr.
Roath has been signaling to the board for some that he was
preparing to retire.
In July, HCP reported its second-quarter profit rose 5.7% as it
posted a bump in sales from its rental segment. However, a key
industry metric, funds from operations, grew less than
expected.
Shares were down 4.1% to $40.05 in recent trading. The stock is
down 11% over the past three months.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
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