Karl Warnke started out in the dirt at Davey Tree Expert Co., working as a landscape laborer.
Over the next 27 years, he rose to the top of the Kent-headquartered company, assuming the CEO post in 2007.
On Thursday, Warnke, 65, revealed he will retire from the job of leading Davey, which is one of the nation’s largest tree-care businesses. The company has more than 8,600 employees in the United States and Canada.
Warnke has seen — and overseen — tremendous growth during his 44 years at Davey, the 13th-largest employee-owned company in the country.
“We expect to be a billion [in sales] in 2019,” Warnke said. That is our plan and we’re actually ahead of our strategic plan.”
As the company grew internally and through acquisitions, annual revenue went from about $320 million when Warnke took over as president in 1999 to more than $820 million in 2015.
As expected, Patrick Covey, who holds Davey’s No. 2 post, is succeeding Warnke. The changes are effective July 21.
Covey, who has been with Davey since 1991, was traveling for business and could not be reached for comment. The Wisconsin native took the job of president and chief operating officer last year as part of a long-term succession plan.
Also Thursday, Davey revealed that it plans to buy the 170-acre Oak Knolls East golf course in Franklin Township, just north of the company’s headquarters in Kent, within the next six to eight weeks. Davey does not plan to reopen the site as a golf course, nor does it intend to sell any of the land. Instead, the company is developing plans for the property that could include office space, a science and learning center, a training facility, a research center and a nursery.
No construction is expected until late next year.
Legacy of growth
The purchase of the golf course is among the significant moves Warnke has overseen, including implementing a formal merger and acquisition process in 2006. Since that year, there have been 43 mergers and acquisitions in 19 states and two Canadian provinces.
Without such growth, Warnke said, the thinking was “we can plod along and watch some of our markets get taken away from us, maintain a very strong bottom line and have a very strong stock appreciation, but in a sense be sitting on a melting ice cube.”
Additionally, he said, the desire to expand geographically and offer new services was driven by the desire to retain and attract talent: “How do you get good people?... You provide them with growth opportunities. You provide them with challenging opportunities.”
Warnke said the company’s growth as well as its strength during the Great Recession (2007-2009) are among key achievements during his tenure.
Davey increased pay, made its two biggest acquisitions and company stock appreciated during the recession, he said.
“We refused to even acknowledge that there was a recession and moved forward,” Warnke said. “It’s all about what we as a company do collectively.”
On Thursday, Davey officials also pointed to Warnke’s commitment to employee ownership and his championing of the company’s succession plan as well as its strategic plan, which includes focusing employees on growth and financial strength.
Warnke, a native of Willoughby, joined Davey in 1980 after receiving a bachelor’s degree in horticulture from Ohio State University in 1973. He joined Davey as a laborer, thinking he could eventually move out of state, perhaps as head of a company territory.
Warnke was invited into the management trainee program, and from 1982 to ’88, he climbed the ladder in utility operations, eventually taking over the division responsible for clearing paths for electric lines and chasing natural disasters. In 1994, he was named general manager of U.S. and Canada operations.
As for Warnke’s successor, Covey joined Davey in 1991 as an internal auditor and in 2012 was named chief operating officer for U.S. operations. In 2014, he added to his role, becoming president of U.S. operations.
The company set up its employee stock ownership plan (ESOP) in 1979 — nearly 100 years after the business was founded by John Davey. The many acquisitions benefit Davey’s employee-ownership system. Acquired employees can buy company stock, with the larger shareholder pool balancing out employees and retirees who are redeeming their stock.
Earlier, this week, the company said it had acquired the 90-employee Arborguard Inc., which is based in Atlanta. Thursday, Davey said it acquired the 10-employee Arborel Tree Service of Pittsburgh.
Katie Byard can be reached at 330-996-3781 or kbyard@thebeaconjournal.com. You can follow her @KatieByardABJ on Twitter.