Oct. 6 (Bloomberg) -- Horace Mann Educators Corp., which sells insurance to public school employees, said Chief Executive Officer Louis Lower has resigned after being jailed for driving under the influence.
Peter Heckman has been promoted to CEO from chief financial officer, the Springfield, Illinois-based company said today in a statement distributed by PR Newswire.
Lower, who had served 10 years as CEO, was placed on leave last month after being sentenced to 60 days in jail. The Horace Mann board said in September that Lower would remain CEO of the company.
The board has “concluded its investigation of all the facts and, with Lower’s retirement and resignations, has ended its consideration of any further disciplinary action,” the company said in a statement.
Horace Mann has posted a profit since Lower became CEO in 2000. The company dropped around seven percent in the period from Lower’s becoming CEO through Sept. 10, the last trading day before his arrest was disclosed.
Lower hit another car while driving into the opposing lane of traffic in Vero Beach, Florida over Memorial Day weekend in May. He responded to police questions and orders with a “blank stare,” and later “fell against his vehicle on the ground” according to the arrest report.
Lower refused to take a sobriety test and to give a breath sample to the police, the arrest report said. Police obtained a search warrant and took a blood sample to find Lower’s alcohol content, which was over the legal limit, the report said.
He pleaded guilty to the charge of DUI with property damage on Aug. 2 and was sentenced to 60 days in Indian River County jail on Sept. 8. He began serving his sentence the same day.
“I thought the jail sentence was appropriate in the case because of the seriousness of the traffic crash, the impact it had on the victims, and Mr. Lower’s unwillingness to cooperate with the DUI investigation,” said David Dodd, the prosecutor in the case, in a phone interview on Sept. 17. Lower’s lawyer, Andrew Metcalf, did not respond to requests for comment.
The passengers in the car that Lower hit were two teenagers, who reported no injuries at the time of the accident, according to the arrest report. They later complained of back pain and migraines resulting from the accident in letters they wrote to the court about Lower’s sentencing.
Lower told some people at the company of his arrest in mid-July, according to the company’s spokesman, Richard Madden. The board was informed on Sept. 9, after Lower had begun to serve his sentence. The board announced on Sept. 13 that they would place Lower on a leave of absence, retroactive to Sept. 9, while he served his jail sentence. Heckman, the CFO, has been serving as interim CEO while Lower was in jail.
“The board should have been notified immediately and it is completely unacceptable that such a delay was allowed to happen,” said Paul Hodgson, a senior research associate from the Corporate Library, a corporate governance research and analysis company. The delay “makes the board look stupid and the executives duplicitous,” said Hodgson in an e-mail on Sept. 20.
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