Tom Tiller said today that he would retire from his post as CEO of Polaris Industries Inc. by the end of the year. He has no plans to take another position with another company, Tiller said.
He does not have any outside offers, Tiller said, and he won't entertain any while he's running Polaris. If he took another position, he said, it would not be with a competitor. "I would never do anything to hurt this company," he said.
A search is under way for a successor, and one is expected to be named later this year.
"After a 10-year run, I believe now is the appropriate time for me to leave the company and to put in place some new leadership," Tiller said. He told securities analysts the company's in good shape and that he's in good health and not burned out.
"So why am I leaving?" he asked. "In short, it is because I think now is the right time for me, for my family and for Polaris." The decision is his alone, he said, although he has been discussing it with the Polaris board of directors for some time.
Tiller said he will continue until a successor is in place, whether that's this year or early next year. He also plans to stay on the Polaris board of directors for about two quarters after his successor is named. "I'll do what's best for Polaris," he said. "I have a vested interest in this company."
Tiller is the largest single shareholder in the company, holding some 500,000 shares of its common stock. He doesn't plan to sell that stock immediately, he said.
Tiller said he and the board have a comprehensive succession plan in place. They will evaluate candidates both inside and outside the company. "In the interim," he said, "I do not expect any major changes in strategy or performance from the company."
A leading candidate to replace Tiller is longtime Polaris executive Bennett Morgan, who was named Polaris president and COO more than two years ago. While Tiller noted that Morgan has turned in a good performance in the second spot, the CEO post has not been handed to him.
"I feel good about where we are in the succession process," Tiller said. "We put Bennett Morgan in the president/COO role, which gave Bennett the ability to demonstrate his leadership and performance in a big job. Bennett has done an excellent job, and with more than 20 years with the company, he may very well be the best person on planet Earth to lead Polaris. But we won't know that for sure until we evaluate the best external candidates."
Prior to being named president/COO, Morgan led several major operations at Polaris, including its ATV and its Internet businesses. He's considered a team player who can build consensus and get solid performances out of employees.
Tiller said the senior leadership team is solid and the company is well positioned against its competitors, even though the market for powersports equipment has been sluggish recently.
The management team, he said, is composed of "young, talented, aggressive and experienced people who love this company and this industry. They know how to deliver, and they've demonstrated that ability for many years."
That team was built in large part by Tiller, and has a strong aptitude for the marketing of consumer products. Tiller replaced a number of old-line, hands-on Polaris executives with young, hard-charging MBAs with strong marketing track records.
Tiller told the security analysts today that Polaris is well positioned against its competition because of its DNA of high-quality/low-cost operations and a tradition of innovation. "This company has demonstrated an ability to adapt and change better than our competitors," he said.
The uncertain economic environment and changing industry market conditions favor a company like Polaris, he said, because of its flexibility and ability to adapt."And as long as we have this culture, I suspect this will remain a very adaptable organization."
Tiller joined Polaris — "as a snot-nosed 37-year-old kid" — as president after spending 15 years in a variety of executive positions with GE.
Polaris posted 2006 sales of $1.7 billion, up from $1.1 billion in 1998. It produces all-terrain vehicles, motorcycles and snowmobiles. It's traded on the New York Stock Exchange under the symbol PII.
In closing, Tiller said: "When I came here, I expected to lead the company for a considerable period, but did not expect to retire from Polaris. Ten years simply feels like the right amount of time for me personally, and Polaris is in good position for a transition. We have a very strong team in place, and are a strong, healthy company."