In 1979, I was approached by a headhunter to leave Exxon where I was the Exploration and Production Controller to join Superior Oil as the Chief Financial Officer. Superior was the largest independent oil and gas company in the industry and had recently gone through a major make-over led by Joe Reid. Joe had raided Mobil Oil to poach their head of exploration, head of production, head of Mobil Canada and innumerable Mobil staff. Joe thought he needed an Exxon financial guy to balance out all of the Mobil guys. Interestingly, Exxon and Mobil ultimately merged many years later.
In any event, I found Joe to be a charming guy. He played football at LSU, was drafted by the Los Angeles Rams and played for the team in their 1951 NFL Championship win. His petroleum engineering degree launched a career in the oil industry where he fell into a remarkable “Alice in Wonderland” situation. He became CEO of “The Superior Oil Company” which was immensely asset rich, people poor and lived in an era that the industry had long since passed. Early on the “The” was dropped as being a bit ostentatious. He and I must have had ten cups of coffee in his office in as many visits as he waltzed around making me an offer. I thought he just liked to bum cigarettes off me as he always asked for one as he was quitting smoking by not buying them. He invited me to a black-tie Houston event that made it all happen. I was dancing with his wife at the time when she asked if I ever was going to work for Joe. I responded that he had not offered me a job but, if he did so, I would give him an answer on the spot if he were not too stingy with the compensation. He did so the following day and I accepted.
Joe’s clear advice was to terminate all of the hordes of existing financial people as they were no good and not to debate their performance or capability. They had done the same house cleaning throughout the technical and operational side of the organization. The Joe Reid approach was “I have lost confidence in you” as no one could argue with you about how you felt. Moreover, it sounds a bit more egalitarian than “You’re fired” from The Apprentice which became a hallmark term in the previous U.S. presidential administration. I have followed his professional termination advice and it has always worked. You would have to admit that Joe Reid, shown below in the image in our 1979 Superior Oil Annual Report, clearly appears to be a leader which he was.
The rough spot in all of our tenure at Superior Oil was the Chairman Howard Keck, son of the founder Bill Keck, who was one tough dude. Bill Keck started out as a drilling roustabout and ultimately founded Superior Oil in 1921. He accumulated drilling leases in California and amassed considerable wealth though he was viewed by the elite folks in Los Angeles to be a crude “roughneck.” Accordingly, he was denied membership in the prestigious California Club. He purposely built The Superior Oil headquarters next to the California Club and made it one story taller. When it was completed, he walked out on the top deck and urinated on the California Club. He was rough and overbearing on his two sons who could never measure up. Bill Keck, Jr. followed his father as chairman and, after a short period, Howard replaced Bill since Bill could not leave the bottle alone.
Howard Keck was pretty much of a shy recluse since he grew up in the era of the “Lindbergh Kidnapping” and was sheltered given the obvious wealth accumulated by his father. Ultimately, the Superior headquarters moved to Houston following the focus of the business in the Gulf of Mexico. The naivete of Howard was demonstrated in a lawsuit brought against Superior by Mobil Oil for proselytizing hordes of their employees. Howard was on the witness stand when the Mobil lawyer made the point that Superior was flying Mobil employees in private aircraft to entice them to join the company. He asked Howard how that would compare to flying commercially and the courtroom broke up when Howard naively responded he did not know as he had never flown commercially. It came as no surprise that the Mobil northern folks came to Texas and lost their lawsuit.
The downside of that naivete was a massive level of ignorance on Howard’s part regarding corporate governance. Once, I replaced the independent audit firm of Canadian Superior with that of the parent company, Superior Oil, when we acquired the minority interest held by others in accordance with required audit standards. However, as we were returning to Houston from Calgary, Howard summoned me to the rear of the G-3 where he was seated behind his flight control screen. The scary question was whether it enabled him to control the aircraft. After a very crisp, one-sided conversation, I thought he was going to ask me to leave the plane at 30,000 feet. Everyone on the plane knew about it but Howard as Joe had forgotten to tell him.
On another occasion, Howard asked me to vote the shares of Superior Oil in the wholly owned subsidiary, Superior Farming Company, and remove his brother Bill Keck Jr. from the board though no one bothered to tell Bill. Everyone but Howard met in Bill’s office, Bill offered early morning drinks and we walked into the board room of the Superior Oil office in Los Angeles. Bill read ahead in the agenda and noticed that I had voted the shares to remove him. He made a few incoherent remarks, pushed his chair back, said “f---- you all” and walked out of the room. Howard just laughed at his brother’s behavior even though Bill was actually the largest shareholder in the parent company.
At that point, I realized that all of this experience was exciting but very fragile. The image of Howard shown below was in the 1979 Superior Oil Annual Report. It was the first time he allowed his picture to be taken. I had it photo-shopped extensively and showed them to Joe who said, “Do not make him look too young, as he will stay forever!” I did use the image in a management brochure wherein Howard asked that I include a statement that all “directors are required to retire at age 70.” He circled the notation, sent it to his brother, Bill, and told him he was removed from the main Board.
Speaking of strange photographs, the one of me below was in the same annual report. I admit it looks pretentious though the photographer was quite proud of the reflection image he accomplished. In any event, the two years at Superior were an amazing high-flying time. I split the Superior stock twice with five new shares for every old one as the share price skyrocketed out of the customary market range. We had joined the real corporate world with tremendous growth and exposure to the financial markets. I took on the international efforts becoming a commuter to London, Israel, Norway and a very eventful trip to Peru. Joe wanted to enter the North Sea and liked London. Therefore, we set up a company there, secured a stunning office manager and put together a blue-ribbon British board.
Eventually, the stunning London office manager moved to Houston to be Joe’s secretary. Prior to our first board dinner with our British directors in London, Joe asked me to take solid gold Dunhill lighters with the Superior logo on them for the new members. During the dinner he decided not to give the lighters to them. On our return home, Joe asked for the lighters to give to the attractive Concorde flight attendants. I reminded him we were not staying in New York but heading on to California on a Superior jet. Yes, Joe had an eye for the ladies as the pompous Lord on the UK board noticed when we danced with his wife at Annabelle’s one night. He said he would arrange for escorts for our next trip which we declined. Sometime later Joe’s secretary joined Howard and his wife on a corporate trip. Upon their return, Howard’s wife asked the Superior Human Relations Manager to fire her which caused great fear on the HR manager’s part. I told him not to worry and then called Joe and said I would structure an appropriate termination package so everything would be fine.
Joe had a different theory about when to terminate people and thought it was best to do it on a Friday evening. He thought it would give those fired time to come up with a satisfactory story to explain to their family members when they did not leave for the office the following Monday. One Friday, he called to chat and said he was going to fire a corporate officer who was not carrying his weight. Early the following Saturday morning he called me at home and asked had I told anyone about him having “lost confidence in the guy” and I said “no.” He was relieved as the guy died that evening from a heart attack without having told his wife.
In early 1981, things began to unravel at Superior. Fred Ackman from Exxon was brought in as Chief Operating Officer to begin the transition for Howard to retire as Chairman and Joe Reid to succeed him. Ackman did not meld with any of us who had run our functions with great apparent success. Moreover, it is not surprising in such heady industry times that most of us, who had made the leap from the comfortable future retirement paths of major oil companies to a more free-wheeling environment, sought to move along and have our own shows.
We basically went off and formed two separate new independent oil and gas companies. Ultimately, Howard placed the blame on our departures on Joe and forced him out. However, Fred Ackman was the catalyst whereas Joe had been the organizational glue that kept us together. Moreover, opportunities for startup oil companies were too appealing and there was plenty of investment capital to support us. When I resigned, I told Joe first and he said you came here as a friend and will always be a friend. Joe told Ackman who then chewed me out. The Superior evolution could have been followed in news media headlines from success to chaos. In May 1981, Forbes published an article entitled Packaging Superior for the Public whereas in November 1981 the Forbes headline was Bring Your Own Management and highlighted the corporate officer departures with photographs and a “red x” as shown below.
In May 1983, the Fortune headline was Brawl In The Family At Superior Oil which outlined the efforts led by Howard’s sister, Wilametta Keck Day, to wrest shareholder control away from Howard and sell Superior. Various proxy resolution battles and attempts in aligning family estate and foundations were launched by Wilametta, shown below, in front of the painting of her father, William Keck, who started the company in 1921. The common statement about the Kecks was they were not a family but just a group of people that shared a common heritage and last name. One year later Mobil acquired Superior for $5.7 billion. By that point in time, none of the Mobil management that was lost to Superior in the past remained.
Joe Reid is shown below with his wife, Kim, who actually worked for me at Superior. Most importantly she made my mentor very happy as you can tell from that smile on his face. Joe passed away at age ninety though he lives in my memory and that of LSU fans as an ardent supporter. Joe, I will have a cigarette ready to offer you in the next life.