• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Fort Worth Star-Telegram, Texas, Mitchell Schnurman Column: This CEO Rakes It in and Gives It Back

Posted on: Sunday, 2 April 2006, 06:00 CDT

By Mitchell Schnurman, Fort Worth Star-Telegram, Texas

Apr. 2--What's more unusual: being named one of the world's best CEOs or pouring millions into rehabbing downtown Fort Worth without asking for a penny from City Hall?

Pick your reason to salute Bob Simpson, the founder and chairman of XTO Energy. And cross your fingers that this is a leadership model we'll see more often.

Fort Worth has benefited from oil barons and oil booms before, and we're on the cusp of it again. The impact of the Barnett Shale, already the largest natural gas field in Texas, is starting to ripple through the economy.

It's expected to bring immense wealth to the region for the next five decades, and XTO plans to be a major producer. Fortunately for Fort Worth, Simpson says he feels an obligation to pump money into the area while his company is pumping out gas.

More on that later, after we note Simpson's latest business feat. Last week, Barron's named him to an elite group of top executives -- the 30 most-respected CEOs in the world. The list includes Warren Buffett, Steve Jobs, Jeff Immelt and 10 others from abroad, and it's the second year in a row that Simpson has made the Barron's hall of fame.

That's what happens when you produce otherworldly results, such as a stock price that's grown 42 percent a year since 2001.

On the civic side, Simpson has made a mark, too. Last month, XTO tore down a decaying skyscraper, the Landmark Tower, which had been besmirching the Fort Worth skyline for years. The Landmark had been dark since 1991, but nobody was able to solve the problem.

XTO will spend about $10 million to remove the eyesore, and it isn't asking for any public help.

"We're not looking for a subsidy when we do something that makes sense to do," says Simpson, who's 57. "The philosophy of this company is hard work, not shortcuts and grease."

It certainly helps that XTO earned more than $1.1 billion in profit in 2005. That's up from $186 million three years earlier, which offers some perspective on just how well XTO is doing these days.

But being flush doesn't automatically translate into being reluctant to hit up the public. Recall Acme Brick's play a few months ago, winning a tax break that may rebate more in sales tax than Acme spends on its small headquarters.

In Fort Worth, XTO has bought five buildings in the past decade, most of them early 20th-century mid-rises constructed around the time of an earlier oil rush.

The company tastefully, almost painstakingly, restored the Baker Building, which has since been renamed the Bob R. Simpson Building. (An example of its fixation on doing things right: It obtained the original First National Bank clock through a charitable donation, restored the piece and placed it on the outside corner.)

XTO continued the rehab of the Waggoner Building, which houses the corporate headquarters, and it's now working on the Petroleum Building, just to the north.

XTO tore down the Landmark and also bought a nearby warehouse to primarily store its off-site records.

Its holdings represent a healthy chunk of the central business district, and the improvements build on the momentum and the historical aesthetic of Sundance Square to the north.

"We're quietly building a corporate campus in the center of downtown," Simpson says.

As the head of a publicly traded company, Simpson can't simply dole out money to boost his hometown -- he needs a business rationale. He can justify the real estate investment by pointing out that XTO has spent far less than a skyscraper would have cost.

He estimates that the company has put up less than $50 million in all, getting the Waggoner for a song in 1995, and it now owns unique structures that are valued by employees and appreciated by the downtown community.

"I can look at the owners of this company, the shareholders, and say this has been a smart investment," Simpson says.

And the Barnett Shale gives him more cover for boosting Fort Worth. Because XTO does business here -- and will do much more in the future -- Simpson says there's more reason to be visible, to be friendly, to be admired.

It recently paid $160,000 for the grand-champion steer at the Southwestern Exposition and Livestock Show, and then donated it to the Fort Worth Zoo.

"I feel free to do things like that now," Simpson says. "We're not trying to create a false image. We're solid people; we're people you'd like."

XTO isn't a retail company like RadioShack, Pier 1 Imports or American Airlines. When it supports the community, it can't hope to get any benefits in the form of higher sales. But a positive image could come in handy as drilling expands in the Barnett Shale, as residents complain about noise or worry about safety.

While he and XTO are building a legacy downtown, Simpson hasn't pushed his ideas on others. I expected him to object to tax breaks in general, because XTO doesn't go for them, but he's OK with the incentives, as long as they're for something strategic.

"We shouldn't be doing it reflexively or indiscriminately, but if it's necessary, I don't have a problem," he says.

He likes the idea of the Trinity River Vision, of increasing the value of the land north of downtown with new waterways. But he doesn't know enough about the finances -- or the politics -- to judge whether it's workable.

And the Wright Amendment? That's not a hard call for the businessman in him: "I'd open it up and let airports do what they're supposed to do," Simpson says.

He isn't worried about Fort Worth or Tarrant County suffering a blow from a freed Love Field. He believes we're entering an era of new prosperity as the Barnett Shale generates billions of dollars in natural gas revenue.

Landowners, school districts and cities will benefit from royalty payments. That money will attract more businesses to Fort Worth, from spas to retirement communities to upscale restaurants. And the drilling itself will create work for oilmen, bankers and lawyers.

"Pickup sales will explode," Simpson predicts, "and so will the sale of vacation homes."

Perhaps it's not surprising that Charles Tandy was Simpson's first business hero. While Tandy was building a diversified retailing company, he was also building up downtown Fort Worth with office towers, a shopping mall and a top-notch hotel.

When Simpson was 5, his aunt would bring him to Fort Worth to shop at Leonards, and after he graduated from Baylor, he started working here 35 years ago. He's spent his entire career in the city, and that influences his decisions today.

"We're not short-term," Simpson says. "We're taking a long view."

Imagine if more corporate leaders had the same perspective.

Online exclusive

You won't believe how much Wall Street loves XTO. Check out The Schnurmanator at

www.star-telegram.com, under blogs.

-----

Copyright (c) 2006, Fort Worth Star-Telegram, Texas

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

NYSE:XTO, NYSE:DJ, NYSE:RSH, NYSE:PIR, NYSE:AMR,

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

More News in this Category