KAHULUI - With Maui Land & Pineapple Co. losing millions of dollars, David Cole has resigned effective Jan. 1 as chairman, president and chief executive officer - leadership positions that made him the second-highest-paid executive among Hawaii companies.
Cole will be replaced as president and CEO by Robert Webber, the company's chief operating and financial officer, and as chairman by Warren Haruki, chief executive officer of Grove Farm on Kauai and a ML&P director.
In a memorandum Friday to company employees, Cole said it was anticipated that Webber would take over as CEO in 2009.
David Cole (left), Maui Land & Pineapple Co.’s
chairman, president and chief executive officer, listens to Chief Operating Officer Robert Webber last month at the company’s Kahului headquarters. Cole is resigning his positions,
effective Jan. 1.
The Maui News MATTHEW THAYER photo
Cole assured employees that "your company is in very capable hands."
Cole will continue to serve as a ML&P director and as the company's representative on the boards of Hawaii BioEnergy and Hawaii Superferry.
The announcement came Friday in ML&P's release of its third-quarter earnings report.
The company reported a net loss of $8.7 million ($1.09 per share) for the third quarter, compared to a net loss of $155,000 (2 cents per share) for the same period in 2007.
William Kennison, Maui Division director for the International Longshore and Warehouse Union, worried that the change of ML&P leadership could lead to the company abandoning pineapple cultivation, a move considered by the company's board last month. Growing pineapple has long been a money loser for the company.
During an Oct. 15 meeting, the board imposed strict conditions on pineapple farming. Those were aimed at reducing costs and preparing to shut down pine operations if losses get too great.
Kennison said he understood Cole supported maintaining pineapple operations.
He said his union wants to see ML&P "maintain pineapple in some shape or form," and he was concerned about members of the board who maintain "pineapple has no future."
Former Maui Pineapple manager Doug MacCluer said he's no longer involved with the company, having sold all of his stock to avoid any conflict with his seat on the county Maui General Plan Advisory Committee.
So he couldn't say what prompted the decision, but he suggested the board of directors "didn't have any choice."
"I see their debt level is huge and when I go over to Kapalua, there's nobody there," he said.
MacCluer, who left when Cole came on board, has been questioning many of the decisions on pineapple operations as well as decisions to dispose of prime farm lands and remake the Kapalua Resort.
"He sold off the Kaahumanu Center, the Costa Rican plantation, Napili Place. He tore down the Kapalua Bay Hotel. And those were his revenue stream during hard times," MacCluer said.
"When the Ritz-Carlton close down and the Kapalua Bay was closed, there weren't enough tourists going to Kapalua and they certainly didn't need to keep three golf courses open so they closed a golf course.
"I think it's very sad. They hurt a lot of people and laid off a lot of people. Now they'll be lucky to hold it together," MacCluer said.
In contrast, he said the Cameron family that had founded Maui Land & Pineapple and initiated the Kapalua Resort made sure that the employees were not harmed by the development planning.
"Those were wonderful people. Colin (Cameron) was a wonderful man who really believed in taking care of his people. This has been very hard on the community and on the people that were employed there," he said.
Claire Sanford, a former board member who continues to own stock in the company, said she had "no idea" what Cole's resignation means for the future of the company once led by her uncle, Colin Cameron.
While Cole will no longer be the company's CEO, the majority owner will continue to be AOL co-founder Steve Case, she said.
And Case "clearly will have a strong hand in the company going forward," Sanford said.
She did recall that when Cole became company CEO in 2003, he said his tenure would be for a "limited amount of time."
Sanford said she finds it "very sad that the company is in enormous debt," and Cole is "leaving it much weaker than when he started it."
"I hope that whatever they do they are sensitive that they are very large landowners on the island of Maui and that can have a huge impact," she said.
Gina Flammer, president of the Kula Community Association, said her group has been concerned about the company's sales of large amounts of land Upcountry. (Records show the company has sold 3,273 acres since 2005, earning $92.7 million.)
"I would hope that the next CEO would recognize and value the roots of the company," she said, adding that top managers should re-evaluate farm operations and appreciate the importance that agriculture plays in Maui's community.
"Companies can have values (that are about) more than making a profit for shareholders," she said.
She said the sales of large amounts of land are "changing the nature of our community . . . all that have impacts go beyond our lifetimes."
Flammer said she'd like the company to see "it's really not all about the bottom line."
Ironically, it was Cole's effort to have ML&P listed on the New York Stock Exchange this year that put greater emphasis on the bottom line.
Kahului-based stock analyst Irwin Yamamoto speculated that Cole's reduced role in the company stems directly from the bottom line and the company's ongoing losses.
Land sales are viewed by Wall Street as one-time earnings that are camouflaging losses by the company, he said.
"Wall Street is based on the numbers, short term," Yamamoto said. "If the results are not there, Wall Street practice is that the top man is out. It's a real bottom-line thing.
"If the results are not profitable (with) a return on investments, then there's a shakeup," he said.
State Sen. Roz Baker, whose 5th Senate District includes West and South Maui, said the leadership change at ML&P appeared to have been planned and wasn't unexpected.
"I wish them well," she said. "Hopefully with the transition, the company will be looking at how to re-employ people to get back some of (its) vibrancy."
Baker said she realizes the difficult economic climate and would not put all the blame for the company's difficulties "at David's feet."
She said she doesn't know how Cole's departure from top management will affect the company, but she hoped it would not bring about the end of its agricultural operations.
"It would be a sad end to a very noble company if they get out of agriculture," Baker said.
Mayor Charmaine Tavares said the county would work with ML&P during its transition to new leadership.
"Mr. Cole's efforts to keep agriculture at the forefront of the company have faced many challenges resulting from tight credit markets and a worldwide economic downturn," she said. "I understand that this transition has been planned for some time, and I offer my congratulations to Mr. Webber and Mr. Haruki on their new roles. I am sure they will find ways to move forward that will benefit the company and the Maui community."
According to a proxy statement filed with the U.S. Securities and Exchange Commission, Cole's total compensation package, including stock options, was worth about $4.1 million. The placed his earnings second among Hawaii's eight largest companies, after Allen Doane, chairman and CEO of Alexander & Baldwin Inc., with $8.6 million.
Brian Perry can be reached at firstname.lastname@example.org.