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Here’s Why Shares of Homebuilder Pulte Are Falling Down

April 4, 2016, 3:10 PM UTC
Construction At A PulteGroup Inc. Housing Development Ahead of Earnings Figures
A contractor operates a nail gun while working at the PulteGroup Inc. Sage housing development under construction in San Jose, California, U.S., on Tuesday, July 22, 2014. PulteGroup Inc. is expected to release earnings figures on July 24. Photographer: David Paul Morris/Bloomberg via Getty Images
Photograph by David Paul Morris — Bloomberg via Getty Images

U.S. homebuilder Pulte (PHM) said on Monday that Chief Executive Richard Dugas would retire effective May 2017, bowing to a demand from founder and Chairman Emeritus Bill Pulte.

Dugas’s decision to retire is due in part to the actions of Pulte, who has demanded an immediate CEO change and is seeking a “different direction” for the company, Pulte said.

Pulte slipped to the No. 3 position among U.S. homebuilders in 2014, from No. 2 the year before, partly as labor shortages delayed home closings and rising labor and material costs hit margins.

“In an effort to avoid a contested public battle that would not be in the interests of shareholders, Mr. Dugas offered to accelerate and make public the Board’s succession plan, prompting today’s announcement,” the company said in a statement.

Pulte‘s board has formed a special committee of independent directors to search for Dugas’s successor, the company said.