ConocoPhillips chairman ready to retire
Sunday, August 15th 2004, 5:42 pm
By: News On 6
HOUSTON (AP) -- ConocoPhillips chairman Archie Dunham sold fruit door to door, delivered newspapers and mowed lawns to help out his family as a sandy-haired, ruddy-cheeked boy, earning his own allowances while learning his first lessons in business.
He was the first in his family to go to college, applying his love of geology and archaeology to earn an engineering degree at the University of Oklahoma. Following a stint in the Marines, Dunham earned a master's degree in business and sought a company that offered a challenge.
"I nearly went to work for IBM. I decided the management development program at Conoco was about as challenging as boot camp in the Marine Corps," said Dunham, who moved to Houston in 1966 with his wife, Linda, to join the oil company.
Dunham, 65, didn't linger in middle management. He built a career that led him to the chief executive's chair in 1996, a tenure highlighted by leading Conoco's separation from DuPont Co. in 1998 and its 2002 merger with Phillips Petroleum Co. Last year ConocoPhillips, the third-biggest of the U.S. oil majors, took the No. 7 spot on the Fortune 500.
Feeling his job is done, Dunham's next step is retirement.
"It's always a bittersweet time in the life of a chairman ... when it's time to retire," Dunham said. "I'm exceedingly proud of what we've created, but there's a time for everything."
As a condition of the merger, Dunham agreed to stay on as chairman for two years -- a tenure that ends in September. Jim Mulva, former Phillips head and CEO of the combined company, will become chairman, as well.
Dunham could stay on the 16-member board until he's 70, but he says former chairmen and CEOs shouldn't stay on their company boards after retirement in the interest of good governance.
As he looks back on his career, he says he was partly motivated to build Conoco's strength and what is likely the last of big oil mega-mergers because of what the nation went through during the 1970s gas shortages.
"When we had crises and it was important that we get energy resources to this country," Dunham said. "I think you have a much higher probability of that occurring if that company's headquartered in the United States, so you work that much harder at getting those resources here, whether it's crude oil or refined products."
In 1981 he helped combat a Seagram Co. Ltd.'s attempted takeover of Conoco, which was blocked when DuPont Co. acquired the oil company.
Dunham's first goal upon being named Conoco's CEO in 1996 was to separate from DuPont. He thought the chemical company would use Conoco's capital for acquisitions when Conoco needed it to grow.
He succeeded two years later -- Conoco went public and raised $4.4 billion in what was then the largest initial public offering in U.S. history.
Conoco's next step after several acquisitions was its marriage to Phillips.
"He was obviously part of a merger that created one of the largest integrated oil companies, and ... one of the most successful," said Fadel Gheit, an analyst with Oppenheimer & Co.
Dunham profited heavily from the $15.1 billion merger. His total compensation in 2002 was $57 million, including a $16.1 million bonus, $8.8 million for tax payments, various perks and estimated value of stock options. The compensation was more than twice the $20.7 million Mulva received. The boosted executive pay packages were one-time deals related to the merger.
Such wealth is very different from Dunham's small-town upbringing.
Born in 1938 in Durant, Okla., Dunham grew up in nearby Ada, where his father worked for Pure Oil Co. He worked odd jobs to help his family, which included a younger brother, Phillip. His early appreciation of hard work helped shape his straight-shooter approach to business.
Frank McPherson, retired chairman and CEO of Kerr-McGee Corp. and a longtime ConocoPhillips director, said Dunham speaks his mind regardless of criticism.
"As a leader, Archie has always been willing to speak for the whole industry as well as for the company," McPherson said. "Archie is not shy about stating his opinion, even when he knows it will be controversial."
Dunham showed that when he opposed the economic sanctions President Reagan imposed against Libya in 1986. Conoco had operated there for more than 20 years.
"I pretty much personally led the charge for our industry beginning in January 1996 to oppose the United States sanctions," Dunham said. "I felt that as a matter of public policy and foreign policy, we need as many different sources of supply globally that we can capture."
President Bush in April rolled back the sanctions after Moammar Gadhafi agreed to abandon weapons of mass destruction.
Looking toward retirement, Duncan says he won't slow down much. He remains a director for Louisiana-Pacific Corp., Phelps Dodge Corp. and Union Pacific Corp., as well as chairman of the executive committee of the National Association of Manufacturers. He hopes to devote more time to other interests, too, such as fishing in Alaska and big game hunting.
"I think my wife is very, very happy that I'm retiring and we'll have more time together and more time for our kids and grandkids," Dunham said. "But I couldn't be more pleased. The company is well positioned now to be a major force in the industry."