July 14, 2024

Beazer Chief Is Dismissed by the Board

Beazer Homes has fired its chief executive about three months after he agreed to give back $6.5 million in bonuses and profits from the sale of company stock in a deal with federal regulators.

The executive, Ian McCarthy, had accrued those gains at a time when investigators said the company was committing accounting fraud. He acknowledged no wrongdoing.

Allan Merrill, the company’s chief financial officer, will take over, the company said Monday.

It also announced that Robert Salomon was named executive vice president and chief financial officer. Mr. Salomon joined Beazer in 2008 as the company’s chief accounting officer.

A Beazer spokeswoman, Carey Phelps, said the company’s board dismissed Mr. McCarthy.

She said Mr. McCarthy would receive a severance package, the terms of which would soon be filed with regulators. She said Mr. McCarthy was eligible for the severance package because he was not fired “for cause,” but was replaced because the board wanted a leadership change.

Mr. McCarthy did not have a listed phone number in the Atlanta area, where Beazer is based.

The surprise announcement sent shares sliding 5 percent, or 15 cents, to $3 a share Monday.

“Our understanding is that this was not a long-planned transition and that the board had met a handful of times without management’s knowledge in order to decide what changes would be in the best interest” of shareholders, said Josh Levin, an analyst with Citi Investment Research.

Still, most analysts say they believe Mr. McCarthy’s departure is a positive.

The change should help Beazer focus on long-term growth, said David Goldberg, an analyst at UBS Investment Research.

Mr. Merrill served as chief financial officer for four years.

In 2008, Beazer restated its financial earnings reports covering the fiscal years from 2002 to 2007, according to filings with the Securities and Exchange Commission. Regulators said Beazer had inflated profits in the 2006 fiscal year by falsely recording home financing transactions and manipulating other results.

In March, the S.E.C. announced a settlement with Beazer, seeking to “claw back” cash and stock incentive payments that Mr. McCarthy earned during a period when the company’s financial reports were in error.

Article source: http://feeds.nytimes.com/click.phdo?i=d29544008393608145cbcace3265c6f9

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