Penn Siegel will step down as president and chief executive officer of Potlatch Corp. in February, officials announced Monday. He will be succeeded by Mike Covey, who is currently an executive vice president at Plum Creek Timber Co.
Siegel, 63, said he is looking forward to retirement after completing several key initiatives at the forest products company, which is headquartered in Spokane. He was appointed to the post in 1999, and will continue in his role as board chairman through the end of 2006.
Potlatch is in the midst of spinning off its timberlands into a real estate investment trust. REITs, as they are also known, have tax advantages for shareholders and a tax structure that will help Potlatch compete more aggressively against other investment groups for new timberland purchases. Potlatch’s REIT takes effect Jan. 1.
Siegel said the company’s board of directors began discussing his successor in September, after the decision to convert to a REIT was made. When no internal candidates stepped forward, Potlatch began an outside recruitment process.
“Mike Covey had the best credentials, and the best fit within Potlatch’s culture,” said Siegel, who was part of the board’s search committee.
Covey, 48, has spent 23 years at Plum Creek. He was instrumental in Plum Creek’s decision to form the nation’s first timber REIT in 1999. Covey also led the integration of The Timber Co.’s 4.6 million acres of forestland into Plum Creek’s land holdings in 2001, when the two companies merged.
Covey currently has management responsibility for 8.3 million acres of forestland in 19 states and 10 wood products plants. The unit’s annual sales total $1.3 billion.
Siegel, a former Wall Street analyst, spent 25 years at Potlatch. His tenure as CEO covered some of the timber industry’s most challenging periods, including low prices for lumber and other wood products, and plunging stock prices.
“When Penn took over as CEO, we were at the start of very difficult times. He took us through one of the company’s lowest points to one of its most profitable,” said Mike Sullivan, Potlatch spokesman.
Siegel oversaw several company reorganizations. Unprofitable business lines were sold off, including hardwood sawmills in Arkansas and a Minnesota plant that made high-grade glossy paper for advertising. During Siegel’s tenure, Potlatch also sold three oriented strand board plants in Minnesota, and used the proceeds to pay down company debt.
Potlatch’s work force slid from 5,300 to 4,000 as a result of layoffs and the sale of assets.
The company today is better focused, and more competitive in the areas where it continues to operate, said Siegel, who credits his predecessor, former Potlatch CEO John Richards, for starting some of the changes.