Ordan Named Sunrise CEO After Founder Gives Up Role

Paul J. Klaassen, the chief executive of McLean-based Sunrise Senior Living, announced last night he is stepping down, more than a quarter-century after he founded a company that became the nation's largest senior living provider.

He is being replaced by Mark Ordan, a founder of Fresh Fields food markets and a former chief executive of Chevy Chase real estate firm Mills Corp. Ordan joined Sunrise as chief administrative and investment officer four months ago.

The change, which will take effect at the company's annual meeting in November, comes after Sunrise has discussed the possibility of selling itself. Ordan sold Fresh Fields to Whole Foods Market in 1996 and Mills Corp. to Simon Property Group in 2007. But Klaassen and Ordan say any speculation that Ordan was brought in to arrange a sale is off target.

"I didn't come here to sell the company," Ordan said.

Klaassen's decision to step down follows three years of turbulence at the company. Sunrise is nearly complete with a financial restatement that has lowered earnings by $173 million. The company has been the target of criticism by shareholder activists, who have alleged insider trading, improper stock-option backdating and cronyism in the company's management.

Internal investigations cleared the company of those charges, but uncovered "inappropriate accounting," and several senior executives were let go. Sunrise recently concluded a bitter lawsuit with its former chief financial officer.

Klaassen, 50, said the challenges were unrelated to his decision to step down.

"There's not a time when you're really ready to go," he said in an interview. "I've had it on my mind for a while. I wanted to see the company through this restatement process."

Nevertheless, Klaassen said the troubles have been painful.

"Like any founder, you hate to see what you birthed" attacked, he said. "I probably take it too personally. Founder-entrepreneurs have an attachment to their company that's different. That's clearly been an unpleasant thing."

Klaassen, in blue shirt and open collar, spoke in his sun-filled corner at the firm's headquarters in McLean. An antique-looking "Sunrise Terrace Retirement Home" sign decorated his office, a memento from the first senior living home he and his wife and co-founder, Teresa, set up in Oakton in 1981. Through an office window, he can look into her office, where she helps oversee the design and operation of homes.

Paul Klaassen will become the company's chairman, a title he gave up earlier this year as part of the series of governance changes announced in response to Sunrise's accounting problems. Current chairman Lynn Krominga, a director who joined the company last year at the urging of a major shareholder, will become the lead independent director. Ordan will join the board.