They are wizards at hawking electricity, fabrication, chemicals, oil and gas wells and swimming pools. They sit at the helms of corporations that last year generated more than $26.2 billion in revenues—and raked in nearly $2 billion in profits. For their work, they were compensated $46 million-plus in cash, stocks and other perks.
The corridor is home to five of Louisiana’s six Fortune 1000 companies—and these are the men who run them.
Terence Hall
Superior Energy Services, New Orleans
Fortune 1000 rank: 933
Revenues: $1.88 billion
CEO total calculated compensation: $16.20 million
Terence Hall has conquered the Gulf of Mexico. Now he wants the rest of the world.
The Orleans firm is the one that comes calling when an oil well needs maintenance, repairs or decommissioning. Superior has the crews and the equipment to get it done, and the liftboats to get there.
The company is widely viewed as the leader in the Gulf of Mexico when it comes to the task. But Hall’s goal is to be top dog on the international scene as well.
The New Orleans attorney, who worked summers offshore during law school and as a consultant in the oil and gas industry, founded the company in 1984. He first started Connection Technology, which manufactured computer monitoring systems to test drilling pipelines, then formed a tubing manufacturing and installation firm and a plug and abandonment company. In 1989, the three independently operated companies came under the common ownership of Superior Group.
In 1995, he acquired the publicly owned Small’s Oilfield Services Corp., and converted Superior into a public company through a reverse merger. With frenetic pace, he then acquired the companies needed to make the firm a full-service entity—11 in two years.
Hall, a low-key, private CEO who rarely grants interviews, did not respond to numerous requests for one over a two-month period.
In what few public comments the Superior CEO has made, two things are telling about Hall’s leadership style. The first is his strategy of allowing acquired companies to operate as wholly owned subsidiaries, keeping their names and most of their management, thereby retaining name recognition, customer contacts and goodwill accumulated over the years. As Hall told New Orleans City Business in June 1997: “We just try to lend some management expertise and help them run their business.”
The other came during an industry slump in 1998, when Superior itself was almost acquired by Parker Drilling for $168 million in stock and assumed debt. Hall expressed his belief that the deal was in the best interests of Superior’s shareholders. “But more importantly,” he said in prepared remarks, “it will allow our existing business lines to grow by accessing Parker’s well-established international platform.”
The merger never happened [Parker’s ?fluctuating stock price made it impossible to fix a value], but Hall went on to pursue his dream on the global scene.
In 2003, Superior bought a United Kingdom-based oilfield equipment rentals firm that served the North Sea, Europe, northern Africa and the Middle East. In a year that was considered soft for the energy sector in the Gulf of Mexico, Superior reported record revenues of $500 million.
Several similar acquisitions followed, including the recent purchase of Duffy & McGovern, which operates in major deepwater oil and gas territories in Europe, Africa, the Americas and Southeast Asia. Hall says that gives Superior “immediate exposure to new markets around the world and further broadens our international footprint.”
So far, Hall’s strategy has paid off. With close to $1.9 billion in revenues last year, Superior entered the Fortune 1000 for the first time at No. 933.
Jim Bernhard
The Shaw Group, Baton Rouge
Fortune 1000 rank: 357
Revenues: $6.99 billion
CEO total calculated compensation: $8.24 million
Will he, or won’t he?
The question of Jim Bernhard’s political aspirations has stalked The Shaw Group CEO for years.
In 2005, as the company aired its feel-good “Louisiana Committed, Louisiana Proud” ?advertisements produced by a well-known Baton Rouge political advertising firm, it was, “Will he run for an elected office?”
In 2007: “Will he run for governor?”
In 2008: “Will he run against Mary Landrieu?”
Today, it’s this: “Will he run against David Vitter?”
The Louisiana native is best known as the wunderkind founder of a pipe fabrication firm he and two colleagues started back in 1987 with $50,000. Today, it has morphed into a $7 billion Fortune 500 firm specializing in engineering, procurement, construction, technology, maintenance, fabrication, manufacturing, consulting, remediation and facilities management, with clients in eight major industries.
But he is becoming increasingly famed for his flirtations with politics—co-chairing former Gov. Kathleen Blanco’s transition team, heading the Louisiana Democratic Party, backing Baton Rouge Mayor Kip Holden, making the rounds of Democratic committees and PACs during Washington Mardi Gras to gauge support for a senatorial campaign. Most recently, his public announcement that Shaw Group would give up $42 million in state economic-development incentives in hopes the money would be used for higher education—and subsequent testimony before a Senate Finance Committee about the dangers of Gov. Bobby Jindal’s proposed cuts—only fueled speculation about his intentions.
Bernhard cancelled an interview and photo session with 10/12 magazine at the last ?minute. Days later, it became public that Rep. Charlie Melancon had notified Democratic Party officials of his intention to run against Vitter, and Bernhard was reported to be on retreat in North Carolina, mulling his own options.
He is said to be smiling and easy-going in public; single-minded and driven in business. His strategy has been growth through aggressive acquisition—particularly when it means buying his competitors right out of business.
Bernhard’s compensation has come under scrutiny on several occasions—most recently in separate Wall Street Journal stories on CEO travel [Bernard spent $642,500 in personal air travel expenses last year] and lavish posthumous paydays [Shaw pays him $17 million a year for two years when he leaves the company—even if he dies].
But his influence is felt all along the corridor, from Shaw Group’s world headquarters in Baton Rouge to the nuclear reactor module fabrication and assembly facility the firm is building at the Port of Lake Charles.
Mark Rohr
Albemarle, Baton Rouge
Fortune 1000 rank: 788
Revenues: $2.47 billion
CEO total calculated compensation: $6.6 million
Mark Rohr’s true passion is photography.
But he realized it wasn’t terribly profitable, so he instead pursued the profession where most of his friends were making money—chemical engineering.
Under the Kentucky native’s leadership, Albemarle—a specialty chemicals firm—has more than doubled its net sales since 2002, when he was named president and CEO.
A year ago, the company moved its headquarters from Richmond, Va., to the corridor, where sister firm Ethyl Corp. is based. Says Rohr: “Having my senior staff in Richmond just structurally was not a good thing when our heart and soul is here.”
Almost immediately, he has taken up the cause of promoting Louisiana to the corporate world. “Louisiana has been good for Albemarle Corp., so I feel an obligation we have is to give back,” he says. “I want to help in any way I can, including drawing other corporations here.”
Some of Rohr’s biggest accomplishments include overseeing complex negotiations with the king of Jordan to produce bromine in that country, and responding to sudden demand for Tamiflu to build an avian and swine flu vaccine stockpile. “We took what was a very poor process to make it that involved 45 steps, and in one month were producing the volume needed to build a stockpile,” he says. “Going in quickly and performing like that is a real hallmark of this company.”
Like many firms, Albemarle’s rapid ascent to the top has, as Rohr puts it, “been interrupted a bit by the global economic crisis. Profits in the company’s polymer additives business, which supplies products to the electronics, auto and construction markets, fell to $5 million in the fourth quarter of last year from $30 million the year before.
Albemarle plans $40 million in cost savings this year and has already laid off 300 of its 3,600 workers and idled production units.
“We saw the consumer just stay home,” he says. “Anything related to autos, electronics, construction or oil field work, which are the areas we do a lot of innovation in, business went from good to non-existent last November. The challenge is maintaining our strategic focus as we work through the short-term reality.”
And what is Rohr’s guiding dictum as CEO of the firm? It’s the advice he got from his dad: Don’t screw it up.
J. Wayne Leonard
Entergy, New Orleans
Fortune 1000 rank: 205
Revenues: $13.09 billion
CEO total calculated compensation: $13.65 million
When Wayne Leonard took the helm of Entergy in 2006, moral was low, financial and operational performance wasn’t meeting expectations and regulators and customers weren’t happy.
Leonard’s first act was to meet with stakeholders, and in doing so he discovered a common theme: Entergy had lost its focus. Says the CEO: “We needed to get back to the business of operational excellence and ?customer service.”
Since then, Entergy has turned its attention back to regulated utilities and built additional value for shareholders by investing in five non-utility nuclear plants in the Northeast.
The results? Outage frequency is down 46% and duration, 22%; customer complaints to regulators has fallen by 77%. And the return to shareholders over the last decade has been 269% [compared to a 70% return for the Philadelphia Utility Index].
Given that, it’s no surprise buy-side ?analysts named Leonard one of the nation’s best CEOs in the country and second in the power industry.
Not everyone is that happy with his performance. In April, Mississippi Attorney General Jim Hood put out a news release accusing Leonard of collecting $54.6 million in salary and other compensation over the three-year period “during a time when his customers are suffering through the worst economic decline since the Great Depression.” The state has accused Entergy of fraud, alleging it overcharged customers for power through pricing schemes.
“The truth is we have kept base rates relatively flat from 1998 through 2008,” Leonard counters. “Fuel costs are what have increased over that time. Much of our generation is natural gas-fired, so fuel costs are largely tied to its price.”
Leonard might seem an unlikely environmental advocate, but he frequently preaches that global warming is the most important challenge for the industry “and possibly the biggest risk the world has ever faced.”
The CEO’s biggest challenge at the helm of the nation’s 205th largest corporation? Becoming neither complacent, nor overly ambitious.. “You have to constantly revisit your own ideas or decisions with an independent view,” he says. “What made sense five years ago, may not today. You have to stay grounded in reality and continue to insist on the small improvements that are available every day as well as plan for the next game changer.”
Manuel Perez de la Mesa
Pool Corp, Covington
Fortune 1000 rank: 966
Revenues: $1.78 billion
CEO total calculated compensation: $1.47 million
Manuel Perez de la Mesa “defaulted” into business after discovering that his boyhood dream of a professional career in sports wasn’t really viable.
A decade ago, the Cuban-born, Miami-raised de la Mesa was in charge of distribution operations for an air conditioning distributor when a head-hunting firm working for Pool Corp. came knocking.
At the time, the company was just about eight years old—having been created when the private equity firm Code Hennessy & Simmons out of Chicago acquired South Central Pool Supply in hopes of creating a national network for pool sales—and had been publicly held for three.
By the time he took over, Pool Corp. was held mostly by mutual funds and other institutions, with no single shareholder owning a significant block of the company.
Meticulous, detail-oriented de la Mesa, who speaks slowly and carefully as though contemplating the weight of every word, set to work improving the internal machinations of the company.
His focus: better business practices, marketing, quality of service and technology to improve efficiency. The staff grew at half the rate of sales. He also brought some discipline to the acquisition process—emphasizing components like market studies.
His lean-and-mean strategy paid off.
In a time when aging baby boomers had more disposable income than previous generations and were migrating south, Pool Corp rose from a $60 million-plus business in 1993 to a $1.9 billion one in 2006. That’s 30-fold growth over a 13-year period. Suddenly, the Northshore firm was the 911th largest in the country.
“What’s most phenomenal is 90% of our profit growth in our industry has been driven by internal execution improvements,” de la Mesa says. “Acquisitions over time helped us enter new markets, but when you factor in the cost of the acquisition and the associated interest expense related to it, the profitability contribution was definitely nominal. So most of our profit growth has been by improving business practices to capture more of our share of market, and operating more effectively and efficiently. Like every business, we are a management business. What we do is manage. That’s how we generate results.”
The last three years have not been kind, however, to the pool industry. It’s been hit much worse than the economy as a whole.
In de la Mesa’s home state of Florida—the second-largest pool market in the world—86% fewer new pools were being built in the first quarter of this year compared to the same period in 2006. Nationwide, new pool sales are down about 80%.
The good news is that Pool Corp. sales are down only 30%. He credits two factors: Running a tight company, and diversification.
Says de la Mesa: “When that element of the business is down 75% to 80% during that three-year period, for our earnings to only be down about 30%, speaks volumes about our people, our execution and the resiliency of industry.”
The CEO is certain Pool Corp. will weather the recession just fine. But one thing he isn’t worried about is its ranking as a Fortune 1000 firm, which has dropped to 966.
“Being the size to be a Fortune 1000 company five years ago was a milestone,” he admits. “But unfortunately, the measurement is not pure; it’s based on sales. There are other things that are more telling over time, like the value we provide to our customers.”
