Los Angeles Business Journal

HCP Fires Chief Executive

By Deborah Crowe Thursday, October 3, 2013

Health care real estate firm HCP Inc. on Thursday said it fired longtime chief executive James Flaherty.

The Long Beach company’s new CEO is Lauralee Martin, who has been on HCP’s board for five years.

Martin, 62, was chief executive of the Americas division of Chicago-based Jones Lang LaSalle. She joined the commercial real estate company as chief financial officer in 2002.

Flaherty also had been the HCP’s chairman, but the real estate investment trust said the board decided to separate the chairman and chief executive roles to enhance the company's governance strength. The board appointed its lead director, Michael McKee, as non-executive chairman.

McKee is chief executive of Bentall Kennedy, a large San Francisco commercial real estate advisory firm.

Flaherty, who was named chief executive in 2003, will remain on the board. HCP, which specializes in senior housing, medical offices and skilled-nursing facilities, did not give a reason for his replacement, but in a conference call with analysts McKee emphasized the board’s desire for new leadership to enhance long-term value for shareholders.

Flaherty was fired because the board lost confidence in his “leadership and his leadership style,” McKee said, and not because of problems with HCP’s business or stock performance.

“This is a pivotal time of challenges, transitions and consolidation for the health care industry both here and abroad, driven by inescapable demographics and changes in the new insurance legal framework,” Martin said in a statement. “The health care industry and its service providers need HCP's smart, sophisticated capital to navigate this transition, to compete, grow and, ultimately, to survive and thrive.”

HCP also announced that Kenneth Roath, 77, chairman emeritus and a former president, had last week announced his plans to step down from the board.

HCP shares closed down $1.95, or nearly 5 percent, to $39.82 on the New York Stock Exchange.