Analysts: D.R. Horton CEO moves a surprise

A. Lee Graham

D.R. Horton Inc.’s recent management shakeup has at least one analyst questioning Donald Tomnitz’ departure from the Fort Worth-based homebuilder.

“It is somewhat unusual,” said Megan McGrath, a real estate analyst with Stamford, Conn.-based MKM Partners LLC, an equity research firm.

Tomnitz stunned the homebuilding industry by stepping down as CEO of the nation’s largest homebuilder by revenue. He retired only a day after the Sept. 30 announcement.

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“Typically, you’d get a CEO transition lag time between the announcement and changeover. That’s not the case here,” McGrath said.

Instead, longtime company executive David V. Auld succeeded Tomnitz as CEO. Auld, who served as chief operating officer until Tomnitz’ departure, joined the firm in 1988. His promotion to executive vice president and COO last November followed a stint as regional president overseeing company divisions in Alabama, Georgia, and North and South Carolina.

Prior to joining D.R. Horton, Auld worked for Texas American Bank and General Dynamics. He graduated from Texas Tech University in 1978 with a bachelor of business administration degree in accounting.

Tomnitz, the company’s president and CEO since November 1998 and a vice president with the firm when he was hired in 1983, will continue in a consulting role for three years, according to the company.

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Auld was considered a “potential” Tomnitz successor, McGrath said, despite what she called his low-key public presence.

“It was a little surprising for some of us in the investor community because David has not been particularly visible with the street or [attended] a lot of investor meetings since he’s been COO,” McGrath said.

Company stock shares dropped following the announcement, falling 21 cents on Sept. 30 to close at $20.52 on the New York Stock Exchange. Shares opened at $20.51 on the morning of Oct. 2, the day this article went to press.

No reason was given for Tomnitz’ resignation.

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“I have been privileged to help build and lead the largest homebuilding company in the United States, and I am very proud of what our team across the United States has accomplished together during this time,” Tomnitz said in a statement.

“After over three decades with the company and 15 years as CEO, it’s time for a new generation of leadership at D.R. Horton, and the company is well-positioned for continued success,” Tomnitz said

Coinciding with Tomnitz’ announcement was the promotion of Michael J. Murray, previously senior vice president of business development, to executive vice president and chief operating officer. Murray played a key role in completing three acquisitions while serving as senior vice president of business development since 2012.

From 2004 to 2012, Murray served as the company’s vice president and corporate controller, after joining the firm in 2002 as director of internal audit. He began his career at PricewaterhouseCoopers and worked at several other companies in finance and accounting roles prior to joining D.R. Horton. Murray graduated from the University of Texas at Arlington in 1988 with a bachelor of business administration degree in accounting.