David Cole, who oversaw the downsizing of Maui Land & Pineapple Co.'s pineapple operations, is stepping down as the company's CEO and chairman at the end of the year.

Cole's resignation from the $4.1 million-a-year post was disclosed yesterday after MLP posted an $8.7 million loss for third quarter 2008.

The 56-year-old Cole, the company's CEO since 2003, will be replaced by Chief Operating Officer Robert Webber.

MLP also announced that former Hawaiian Tel CEO Warren Haruki will become chairman of the company's board on Jan. 1.

"(The) board has elected Robert Webber to succeed me as the president and CEO," Cole said in a news release.

"Rob has served as the company's chief operating officer since March 2008 and CFO since May 2006 and is exceptionally well equipped to steer the company through these challenging times."

Shares of MLP dropped 15 cents to close at $14.86 on the New York Stock Exchange yesterday.

The stock hit a 52-week low of $12.54 last week after the company disclosed that Lehman Brothers, the chief lender on the $370 million Ritz-Carlton Club and Residences at Kapalua Bay, filed for bankruptcy in New York and cut off funding on the project.

Company spokeswoman Terri Freitas Gorman said Cole's decision was not related to the company's economic situation or problems in the pineapple growing business but is part of "a planned transition" which began earlier this year when Webber was named as the company's COO.

Gorman said Cole, who owns a home in Kula, will remain on Maui and will serve on MLP's board.

He also is a director of the Hawaii Superferry and Hawaii Bioenergy LLC, a local renewable energy concern. MLP is an investor in both companies.

When he joined the company in 2003, Cole was hailed as a high-tech entrepreneur who would save MLP's agricultural operations.

But when the company laid off 274 workers in July, Cole became the target of criticism in the close-knit Maui community.

Douglas MacCluer, former vice president of MLP's pineapple operations, said Cole's tenure at the company is marked by a number of costly mistakes.

Cole sold MLP's promising Costa Rica plantation and sold off hundreds of acres of fertile pineapple-producing lands in Hali'imaile in Upcountry Maui, he said.

When Cole came on board in 2003, pineapple accounted for more than half of the company's revenues.

Today, it represents less than a third of MLP's business.

"I would say that the company has done terribly under his leadership," said MacCluer. "I think that change was inevitable and is probably good for the company."

Cole's defenders have said Cole and MLP's management has done their best to preserve pineapple, which lost more than $60 million in the past three years due in large part to low-cost foreign competition.

Yesterday, MLP disclosed that its agricultural unit posted an operating loss of $9.5 million in third quarter 2008, which compares with a loss of $5.6 million in the year-earlier quarter.

Operating profits at the company's community development arm declined to $2.5 million during the third quarter from the year-earlier's $9 million.

More recently, the company's development of the 146-unit Ritz-Carlton Club and Residences was affected by lender Lehman's failure to deliver more than $50 million in necessary funding.

The project — a partnership between MLP, Marriott International and former America Online co-founder Steve Case's Exclusive Resorts LLC — is 83 percent complete and more than $200 million of the project's $370 million in financing has already been funded.

But MLP and Marriott had to provide an emergency bridge loan due to the lending shortfall.

The partners also are looking to refinance the Lehman debt with new lenders.

Prior to joining MLP, Cole, a Kailua native and University of Hawai'i-Manoa graduate, served as a senior executive at AOL and headed software company Ashton-Tate Inc.

Last year, he earned $4.1 million, making him the second-highest paid CEO in Hawai'i behind Alexander & Baldwin Inc.'s Allen Doane, who received $8.6 million.

Cole's 2007 compensation was more than double his 2006 pay of $1.5 million.

The 48-year-old Webber joined MLP in 2006 after serving as president of DynTek Inc., an Irvine, Calif.-based provider of professional technology services.

He earned $856,958 as MLP's CFO last year.

"It has been a privilege to serve alongside David Cole and we will execute his vision for our company," Webber said in a news release.

"We have a very strong management team in place and we are well positioned to tackle the challenges ahead."