Bloomington-based Toro Co. announced that chairman Michael Hoffman will retire from the board of directors and that president and CEO Rick Olson will assume the chairman role. The changes take effect Nov. 3, the start of Toro’s next fiscal year.
Hoffman began his Toro career in 1977 as an equipment service representative and rose to succeed his mentor Ken Melrose as CEO in March 2005. He added the chairman role a year later.
He ceded his CEO role last fall, but remained chairman.
“My 40-year Toro career has been rewarding beyond imagination, from the richness of the relationships I share with employees, customers and other colleagues, to the totality of all the different career experiences on my Toro journey,” Hoffman said in a news release.
After Hoffman’s retirement, the Toro board will shrink from 11 to 10 members.
Olson joined Toro in 1986 and moved up the management ranks through the company’s engineering and operations side. He was named president and chief operating officer in September 2015 and CEO a year later.
“I am honored to have been elected chairman and want to thank the board for its support,” said Olson. “It is a humbling experience following in the footsteps of a long line of legendary Toro leaders, who helped forge our strong culture and legacy of excellence.”
There has been an increasing trend by the largest U.S. companies to split the role of chairman and CEO. A decade ago, a third of the largest companies split the role of chairman and CEO. A report by Willis Towers Watson earlier this year shows that more than half of the largest U.S. companies now separate the role of chairman and CEO.
It is more common for a temporary split as outgoing CEOs continue to serve as chairman for a time. According to the Willis Towers Watson report, 37 percent of stand-alone board chairs at Fortune 500 companies are former CEOs of those companies.
Companies that separate the role of chairman and CEO generally cite that an independent chairman improves the board’s ability to oversee management. Absent an independent chairman, many companies employ a lead independent director.
Toro’s board does not have a policy on the separation of the two roles but does require a lead director when the chairman is not deemed independent. Robert Buhrmaster, a Toro director since 1996, will continue to serve as lead director of the board.