PHM PulteGroup Inc

The founder of home builder PulteGroup Inc. said the company's board should identify candidates to replace its chief executive by the end of July, citing the "urgency and gravity" of the decision.

"Time is of the essence and it is imperative that the company, its shareholders and its employees not be left in suspense regarding PulteGroup's leadership," wrote William J. "Bill" Pulte, the company's founder and largest shareholder, in a letter to board members Wednesday.

Over the past two months, Mr. Pulte and CEO Richard Dugas have been embroiled in a public battle over the future of PulteGroup, the nation's third-largest home builder. Amid pressure from Mr. Pulte, Mr. Dugas announced in early April he would be retiring next year.

But Mr. Pulte has continued to demand Mr. Dugas's immediate resignation, arguing to board members and shareholders in a series of letters that PulteGroup's stock performance and sales volume have lagged behind rival home builders throughout the housing recovery.

In Wednesday's letter, Mr. Pulte, 84 years old, noted that board members sought his input in finding a successor to Mr. Dugas. He said the next chief executive should already have been a CEO at a public home-building company or should have at least 25 years of building and land-acquisition experience in multiple markets across the country.

Mr. Pulte also said Mr. Dugas told him in March about a "pre-conceived succession plan" for the company's president, Ryan Marshall. Mr. Pulte said it was important that the board's search committee and independent executive search firm be "fair, truly independent and highly transparent."

A spokesperson for Pulte didn't immediately respond to a request for comment. Mr. Pulte declined to comment beyond the letter.

Shareholders re-elected Mr. Dugas as chairman and chief executive, along with the entire board, at the company's annual meeting in May. Last week PulteGroup said activist hedge fund Elliott Management Corp. had taken a stake in the company, though a spokeswoman didn't say how large of a position.

According to the latest filings, Mr. Pulte is the biggest stakeholder of PulteGroup, owning about 8.9% of shares outstanding.

Shares of Pulte rose 0.9% to $18.76 in midday trading.

Write to Chris Kirkham at chris.kirkham@wsj.com

(END) Dow Jones Newswires

June 15, 2016 12:45 ET (16:45 GMT)

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