Milwaukee-based REV Group Inc. announced Monday that Rod Rushing will replace Tim Sullivan as chief executive officer of the specialty vehicle maker.
Rushing was most recently president of the North American building solutions business at Johnson Controls, a $9 billion revenue business with around 30,000 employees.
“The board is confident we've selected the ideal next leader of REV Group in Rod. He has a proven track record of delivering high-quality performance through organizational development, financial acuity, commercial excellence, and operational discipline. We were impressed with Rod as a leader, his strategic approach to managing business drivers, and his ability to align resources to achieve results and deliver shareholder value,” Paul Bamatter, chairman of the REV Group board, said in a statement.
Rushing will replace Sullivan, who has been CEO at REV Group since 2014, when the company was known as Allied Specialty Vehicles. Today, the company’s portfolio is made up of 29 specialty vehicle brands, which Sullivan helped bring together under a single umbrella.
In 2016, Sullivan moved the company’s headquarters from Orlando to Milwaukee, the second time he’d brought a large company to the city after doing the same with Gardner Denver in 2014. Sullivan also publicly declared that REV Group would build U.S. Postal Service delivery vehicles at a plant at Milwaukee’s Century City business park development if it landed the contract. But the company’s partnership with a Turkish firm for the project ended before the contract was awarded.
While REV Group’s revenue has grown, in part through acquisitions, from $1.74 billion fiscal 2015 to $2.4 billion in fiscal 2019, the company’s profitability has suffered. Gross profit and net income peaked at $295 million and $31.4 million respectively in fiscal 2017. Last year the company’s gross profit had fallen to $252 million and the company reported a $12.3 million net loss.
According to securities filings, New York-based private equity firm American Industrial Partners, which owns 53.4% of REV Group stock, on March 17 provided written consent to the company to remove Sullivan from his position on the REV Group board and replace him with Rushing.
The board then removed Sullivan as president and CEO and replaced him with Rushing.
Sullivan did enter into a separation agreement with the company that will give him three years of salary continuation, continued edibility for vesting of restricted stock units and immediate vesting if there is a change of control. Sullivan had a base salary of $880,000 in 2019.
The agreement also calls for Sullivan to continue in a consulting role with REV Group through Jan. 8, 2023.
According to securities filings, REV Group entered into an offer letter with Rushing on March 5. The agreement gives Rushing an initial base salary of $880,000 along participation in incentive plans and stock awards.