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UFPI Chairman To Sell Portion Of Shares In Advance Of Retirement
GRAND RAPIDS — In accordance with the mandatory retirement policy he put in place 10 years ago, Peter Secchia, majority shareholder and chairman of Universal Forest Products Inc., will retire from active employment at the company at the end of next year.
Secchia intends to sell or transfer a significant portion of his family holdings in UFPI over the next five years, which could include private placements, sales to the company and its employees, and charitable gifting
He’s eligible to sell up to 198,000 shares on the open market.
As Secchia pointed out, the news release UFPI issued Wednesday was not intended to announce his retirement. Instead, it was meant to be a financial announcement explaining to shareholders why he is selling and how he is selling some of his shares.
The sale, transfer or gifting of shares involves a substantial block of his beneficial ownership shares, or unregistered shares, of which there are about 2.5 million. Secchia personally owns about 1.5 million shares in the company.
Unregistered shares are those kept by the insiders — managers, founding family, the corporation etc. Over the years, Secchia has gifted or given unregistered shares to 37 different entities and individuals, including foundations, universities, charities and family members. The holders of the unregistered shares earn the stock growth and dividends.
When insiders want to sell unregistered shares they have to register them as way of notifying the SEC that they are selling. Secchia’s press release was just such notification. At the same time, it was a way to let shareholders know there is no cause for concern.
“People see that the insiders are selling and they think it means bad news and that the insiders are getting out because there is a problem. I’m announcing that I’m selling some shares and doing it in a kind and gentle way, so somebody who has a half million shares doesn’t say, ‘Well, the chairman is dumping shares so I’d better dump.’”
The company’s retirement policy requires that Secchia retire at 65, the age he’ll turn next April.
If he were to wait until his retirement in December 2002 to dispose of a large number of his shares, that would be hard on UFPI because it’s a small company with a small float and is more than 50 percent insider owned, he said.
Secchia plans to keep “a large amount” of shares, and he’s also considering using some of his holdings to create a stock fund for the children and grandchildren of the company’s management team because, he said, family members are important to the executives who are going to continue the company.
“It boils down to basics: motivation,” he explained. “If your spouse and your kids and your grandkids are encouraging you to go to the office, you’re going to go to the office. If they have an investment in what you accomplish at the office, you’re going to feel better when you do a job well.”
With forced retirement just 15 months away, he has a tinge of regret about penning the mandatory retirement policy, yet he’s still convinced it was the right thing to do. He made the rules, and he’s going to abide by them.
“I looked around and I saw there were a lot people here. The good news was they enjoyed their work. The bad news was they enjoyed their work and might stay too long — including me. So I thought we’d pick a date and make it work. Little did I know I’d be the first casualty,” he said, displaying his trademark sense of humor.
Because the policy moves people at the top out, it creates more opportunity for younger people in the firm to move up a notch, he added.
His retirement will cap 40 years of service to the company, and though he will no longer be an employee after December 2002, he will continue to serve UFPI as its non-employee chairman of the board.
Secchia acknowledges it will be difficult to walk away from his day-to-day responsibilities at UFPI 15 months from now.
“It’s a bittersweet feeling, but it’s nice to know I’m leaving the company in good hands,” he said, referring to his top-level managers, one of whom is William Curry, vice chairman and CEO. Curry has been with the company 30 years and will take over for Secchia following his retirement.
There’s already someone lined up to take Curry’s place when he faces mandatory retirement. Like Curry, most members of UFPI’s management team were handpicked by Secchia himself.
“We’ve got a great succession plan and I’m proud of these guys; they’ve done a great job,” Secchia remarked. “It’s been a good ride for me.”
Universal Forest Products was founded by William Grant Sr. as a lumber wholesale business in 1955. Secchia took a job with the then $1 million company in December 1962 on what he expected would be a temporary basis because he had a job lined up with Chrysler Corp. that was to start in June the following year. He stayed with UFPI simply because he liked it, he said.
Secchia was seated on UFPI’s board of directors in 1967. He has served as chairman of the board since 1971. That same year, he bought controlling interest in the company, which by then was recording annual sales of $11 million. He took the company public in November 1993.
UFPI has since grown into the nation’s largest manufacturer of engineered components for the manufactured housing and site-built construction markets, as well as a major supplier to the do-it-yourself market. The company currently has 89 manufacturing plants in 77 locations throughout the United States, Canada and Mexico and employs more than 7,000.
During his tenure with the company, Secchia had the distinction of serving as U.S Ambassador to Italy from 1989 to 1993 under former President George Bush.
He’s proud of the business he has built, and credits much of the company’s success to Curry’s savvy in selecting top-notch people.
“He’s even better at that than I was. He lets people do what they’re supposed to do. Then I watched over them with a magnifying glass and micromanaged,” he joked.
The chairman of the board said he’ll have plenty to keep him busy in retirement. He’s already heavily involved in the Grand Rapids community, with restaurants, catering and real estate companies under his ownership, in addition to his involvement in public service, charities, various boards and committees, and politics.
Secchia doesn’t, however, have any plans to run for office. Or so he says now.