10-3-13 12:39 PM EDT | Email Article

(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

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

October 03, 2013 12:39 ET (16:39 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
Add a Comment

News   More...

Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar


Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - 2013/10/3 - HCP Fires Flaherty as CEO; Names Jones Lang LaSalle's Martin as Replacement -- Update
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: HCP Fires Flaherty as CEO, Citing Leadership Concerns -- 2nd Update  |  Next: HCP Increases Credit Facility to $2.0 Billion with Improved Pricing and Extended Term