Paccar said Monday that Ronald Armstrong will become its new chief executive officer, replacing founding-family scion Mark Pigott, who ran the truck manufacturer for 17 years.
Armstrong, who now serves as president of the Bellevue-based company, will become CEO on April 27. Pigott, 59, will stay on as executive chairman.
Chief Financial Officer Robert Christensen will become Paccar’s president next April as Armstrong takes on the new role.
Armstrong’s appointment marks the first time since 1965 that the commercial truck maker’s helm will be led by someone outside the family of William Pigott Sr., who founded the company that eventually became Paccar in 1905. Pigott took the reins from his father, Charles, in 1997.
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But the succession doesn’t signal abrupt change: Armstrong, 58, has worked at Paccar for 20 years, and has served as president since 2011.
Armstrong will have a salary of $1.1 million and will be eligible for additional annual compensation, while Pigott will receive an annual salary of $500,000 as executive chairman, Paccar said Tuesday.
Pigott, in his role as executive chairman, will help guide the company’s future strategy, Paccar said. His 49-year old brother John, a partner in a private-investment company, retains a seat on the board. As of the end of last year, together the brothers controlled 2.7 percent of the company’s shares, according to a securities filing.
Other relatives hold a significant portion of the shares, said Mike Roarke, an analyst with McAdams Wright Ragen, who added that Paccar has been “an old-time, traditional values company” that favors a long-term approach to investment and personnel decisions.
Nevertheless, the move, which comes in the wake of changes to Paccar’s corporate governance structure, closes an era. “I’m very surprised by this change,” Roarke said.
Last week Paccar’s board amended its rules to allow separating the roles of chairman and CEO. The board also said it would reduce its size to 10 members after lead director William Staley, former CEO of Cargill, steps down in January. Former Unocal CEO Charles Williamson will become lead director after Staley’s departure.
Before joining Paccar, Armstrong was a senior manager with consultancy Ernst & Young for 16 years. He graduated from the University of Central Oklahoma with a degree in accounting. He is a certified public accountant, the company said.
In June, Paccar paid $225,000 to settle a Securities and Exchange Commission (SEC) lawsuit alleging that aspects of the company’s financial reporting between 2008 and 2018 were cloudy. Paccar didn’t admit or deny the charges but agreed to the penalty and to a permanent injunction against future violations. The company also tightened up its financial reporting. The company said at the time it fully cooperated with the SEC probe.
In the quarter that ended Sept. 30, Paccar reported net income of $309.4 million, or 87 cents a share, up from $233.6 million or 66 cents a share in the same period the previous year. Profits for the first nine months of 2013, however, were 2.4 percent lower than the prior year at $837.1 million.
Paccar shares rose 2 percent Monday, closing at $57.31. The stock is up 26.8 percent from the beginning of the year.
Ángel González; 206-464-2250 or firstname.lastname@example.org. On Twitter: @gonzalezseattle