After reports questioning the credibility of Mr. Terrence Lani's past education arose, he resigned from his CEO position at MGM Mirage. In an 8-K Sec filing yesterday, KB Homes also announced the departure of Mr.Terrence Lani from his director post at the company. As per the 8-K filed by KB Homes , Mr. Lani informed KB Homes of his decision on November 13th. Although, Mr.Lani would have us believe that the decision to resign from MGM and now KB Homes, is driven by the need to have some personal time, his decision came too close on the heels of the WSJ report about the authenticity of his MBA.
Mr. Terrence Lani was chair of the Compensation Committee at KB Home. If you remember, there were compensation governance issues at KB Homes when the CEO was accused of choosing favorable stock option dates for himself and others in his company. (Incidentally, he settled charges with SEC in September of this year.)
Mr.Terrence Lani had been director at KB Homes since 2003.
There's a news article which says that Toll Brothers needs financial help to survive. Toll is a family owned company run by two brothers from Pennsylvania. Its understandable if some of the sophisticated insights of the financial markets were not available to the management of home builders. They're good at what they do and probably never felt the need to hire MBAs or Finance Experts. The sad part is that the market has influenced their malaise so much (all the negative publicity etc. over homes slowing down purchases even further). I'm sure they've made bad bets and are holding onto devalued land and projects. Bottom line: You need to understand where your product ends up no matter what your core competency.
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