For the second time in 10 years, Armstrong World Industries has reached outside the company — and its industry — to find its new leader.
Armstrong said Friday it has hired Matthew J. Espe as its next president and chief executive officer, effective in late July.
Espe, 51, of Newtown Square, will fill the posts last held by Michael D. Lockhart, who stepped down in February.
Espe is chairman and CEO of Ricoh Americas Corp., which makes office equipment such as copiers, printers and scanners. It's a subsidiary of Ricoh Co.
Before that, he was chairman and CEO of IKON Office Solutions, a $4 billion office equipment firm, which Ricoh acquired in 2008.
Prior to his eight years with IKON and Ricoh, Espe spent 22 years with General Electric, leading units in Europe, Asia and North America.
Ultimately he became president and CEO of GE Lighting.
Like Lockhart, himself a former GE executive, Espe is coming to Armstrong as a newcomer to its lines of business.
Those lines are designing, manufacturing and selling floors, ceilings and cabinets.
They also are the only two people in Armstrong's 150-year history to take its helm from outside the company, rather than being promoted from within.
But Armstrong Chairman James J. O'Connor said Espe has shown the skills he'll need to be a successful leader of the Lancaster-based firm.
In a prepared statement, O'Connor said:
"Matt brings a proven track record of placing a strong focus on customer service and profitable growth and is ideally suited to lead Armstrong into its next phase of growth.
"Matt is an experienced executive who knows how to run large organizations efficiently and effectively."
Espe, in a prepared statement, said:
"I'm privileged to be joining such a talented team whose dedication has produced an industry leader known for quality products and superior customer service.
"I'm looking forward to what we can do together to build on that success."
Espe said the decision to leave Ricoh Americas "was an extremely difficult one."
He pointed to "all the great employees and the opportunities we have to build on our leadership position in the industry.
"The opportunity to become the CEO of Armstrong, however, was a great fit, and one that I could not ignore," Espe said.
Espe was praised for his contributions to Ricoh Americas, of West Caldwell, N.J., by Kevin Togashi, the CEO of its parent firm, Ricoh Americas Holdings.
"Matt has provided outstanding leadership and direction to our organization … with a focus on increasing our market share and improving our business going forward," Togashi said.
As president and CEO of Armstrong, Espe will lead a firm that posted $2.8 billion in sales last year and has 10,600 employees, including 1,800 here.
Espe's compensation will be generous and multifaceted, according to an Armstrong filing with the Securities and Exchange Commission.
He will receive a $980,000 annual salary and, assuming he's still on the job Nov. 1, a $3.45 million bonus, the filing said.
In addition, Espe will get stock options valued at $3.5 million and restricted stock units valued at $2.6 million.
Beyond that, he'll also be eligible for an annual cash bonus of 100 percent to 200 percent of his salary and various Armstrong long-term incentive plans.
The Armstrong board plans to name Espe a director after his appointment as CEO becomes effective. O'Connor will continue as chairman.
Espe, a graduate of the University of Idaho, holds an MBA degree from Whittier College. Besides leading Ricoh Americas, Espe is a director of Unisys and Graphic Packaging Holding Co.
tmekeel@lnpnews.com
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