Homebuilder Toll Brothers names Yearley new CEO, current CEO Robert Toll to remain chairman

Toll Brothers board elects Yearley new CEO

LOS ANGELES — Luxury homebuilder Toll Brothers Inc. said Monday co-founder Robert Toll will step down from his long-held post as chief executive next month, but will retain his title of executive chairman.

The company’s board of directors elected Douglas Yearley Jr., to succeed Toll as CEO, effective June 16.

Toll, 69, has held the chairman and CEO jobs since co-founding the company with his brother, Bruce, in 1967.

Asked why step down now, Toll quipped he’d been contemplating doing so since he was 26.

“Why now? Why not?” he said in an interview. “I’m almost 70 and (Yearley) just turned 50. Summer is coming up.”

Toll said he put off the move until now because he feels the worst of the housing market downturn is over.

“It would have been inappropriate last year or the year before,” he said. “It would have looked like I was going to slip out the back (door).”

In February, Toll said he expected it would take several years for the housing market to recover fully.

Still, fortunes have been improving for homebuilders since last year, thanks to low mortgage interest rates, falling home prices and homebuyer tax credits.

In March, new home sales nationwide posted the biggest monthly increase in 47 years. A key gauge of U.S. homebuilders’ confidence released Monday showed the sector is feeling more bullish about its prospect for sales this year, although many experts project home sales overall will weaken in the near term because the homebuyer tax credits expired in April.

Toll Brothers, which is based in Horsham, Pa., has operations in 20 states and is the nation’s largest builder of luxury homes.

Because it caters to luxury buyers, the company hasn’t been in position to benefit as much from the first-time homebuyer tax credit as other homebuilders.

The builder saw home sales drop 10 percent in the November-January quarter. However, it cut its loss for the quarter by more than half thanks to a sharp drop in before-tax write-downs compared with the prior-year period. And it has been taking advantage of cheaper land prices to buy new parcels for future homes.

Word of the executive shuffle came after the close of regular trading Monday. Shares in Toll Brothers rose 12 cents, or 0.6 percent, to $21 in after-hours trading after ending the regular session down 3 cents to $20.88.

Wall Street views Toll as the company’s driving force, but the change in leadership and the timing shouldn’t spook investors, Stephen East, an analyst with Ticonderoga Securities, said in a research note Monday.

“From a comprehensive strategy perspective, we believe this could be a positive as Toll’s physical involvement likely did not match his presence felt within the organization in recent years,” East wrote.

Toll said he will continue to be involved in major company decisions regarding personnel, policy, land acquisitions, investor relations and public relations, but in an advisory role.

“Primary responsibility will be Doug’s, and ultimately he’s the one that’s going to have to push the button,” Toll said.

Yearley, 50, has been the builder’s executive vice president and is a 20-year veteran of the company.

He has managed several of the company’s homebuilding and support divisions, overseen land and builder acquisitions and led Toll Brothers’ entry into the urban high-rise market, among other initiatives.

He said he intends to keep things “business as usual” when he takes the builder’s reins next month.

“My job is to keep things going the way Bob did for decades,” Yearley said. “I don’t see a lot changing.”

On the Net:

Toll Brothers: www.tollbrothers.com