T. Boone Pickens Jr., the oilman, entrepreneur and company hunter, has just delivered his standard address to the student senate at West Texas State University, in which he exhorts them to ”stay fit,” ”work hard,” ”don`t cheat” and ”analyze well.” None of this seems to answer the implicit question–how can we get to be as rich as he?–but the students appear satisfied nonetheless, just to be in the presence of the Man Who Made Corporate America Quiver.
Pickens is on his way back to his car–an eight-year-old Mercedes, he informs a visitor who didn`t ask. Obviously he is sensitive to the fact that even a hint of a corporate perk would be unseemly for a man who attacks America`s top corporate executives for their preoccupation with ”the four P`s”: perks, pay, power, prestige–but not the ”p” that he deems most essential: performance.
On the way, he stoops to pluck a quarter from the grass. He chides his assistant for missing it. ”You haven`t had to scramble like I have,” he says. ”I`m always looking. The next time it may be much bigger than a quarter. It may not be any more than a dime, but it means that you`re hustling.”
Never let it be said that Thomas Boone Pickens Jr. is not hustling. At 58, he is hustling just as hard as he did at 28, when he set out to build an oil and gas empire. The only difference is, with an annual compensation approaching $10 million, he no longer needs the money.
The man who made headlines in the early 1980s with his colorful name and bold takeover attempts of behemoths such as Gulf Oil, Phillips Petroleum and Unocal is hustling to keep his company, Mesa Limited Partnership, afloat in tough times. At the same time, he is leading his self-styled crusade against what he considers rampant bad management in corporate America. One prong of that attack is his recently published autobiography, ”Boone” (Houghton Mifflin, $18.95).
In the early 1980s, Boone Pickens showed America that ”the little guy can make the big guy pay attention,” as he puts it, and in the process he became a leading player in one of the greatest flurries of takeovers, mergers and restructurings in the history of American business. For better or worse
–and you can hardly find anyone who is not of one opinion or the other
–Boone Pickens has helped change the face of business in America. In 1986 alone, 4,023 companies were swallowed partially or whole, according to Mergers ` Acquisitions magazine, and untold millions of workers were affected, often in layoffs.
Pickens himself still does business much the same way as always: full-out, 12 hours a day, 7 days a week. What drives him, he says, is his personal debt of $55 million. But that is not likely. What drives him, says Bea, his second wife, is the game. ”It`s like people who are always fine- tuning their cars and can never get it exactly right,” she says. ”Boone is always tinkering.”
He insists it`s fun. But he doesn`t smile much, the jowly stone face set in a perpetual hangdog expression, the dour demeanor suspended only occasionally for brief flashes of the sardonic Pickens wit.
Pickens is nothing if not deadpan. Returning from the speech at West Texas State, he calls Bea on the car phone. She informs him, ”I`ve fixed you a good dinner: gumbo.”
”What?” he says. ”What`s that you`re calling me? Jumbo?” He proceeds along this line, very dryly, for several moments until his wife gets the joke. —
On a typical day, a visitor sees only one side of Boone Pickens, the business side, and he doesn`t see much of that. Interviews scheduled for 9 a.m. tend to be delayed until 2 p.m., presumably when urgent business has been completed.
But business never stops for Pickens. At his desk, he fields a reporter`s questions, signs autographs for his new book, barks orders at his secretary, takes phone calls, reviews charitable contributions. He gives generously, and has said that half of his estate will go to charity. He keeps clips of just about every word ever written about him and periodically in an interview he will issue commands for an aide to fish out clips on a variety of subjects. He is his own one-man P.R. campaign. ”I have to do it,” he says. ”I`m sitting here bucking the 200 biggest corporations in America. They`ll tell you, `We`re after Boone Pickens` scalp.` ”
They won`t get it without a fight.
”I never worry,” says Pickens, who affects a restrained, unflappable air that masks a flinty, combative personality.
Pickens has made a career of his poker-face and gambler`s nerves. He is always alert for undervalued companies, that is, companies whose assets exceed the current market value of the stock. He says they are usually undervalued because the companies have been mismanaged by executives who invest little of their own money in company stock and instead grow fat from bloated salaries and bonuses. By contrast, Pickens says, 90 per cent of his net worth
–estimated to be $107 million–is tied up in Mesa stock.
So he and a group of partners buy a chunk of another company`s stock–say $2 billion or so–and politely ask the management to make changes. The result, he finds, is they get defensive. They call Pickens ”hostile.” They call him a ”barbarian,” and a ”communist.” That makes him . . . disappointed.
”I don`t get mad about things,” says Pickens. ”I get disappointed.”
From the general tenor of the office–security is tight–his disappointment could be quite formidable.
Pickens` office, on the 5th floor of a 10-story buff-colored building in downtown Amarillo, remains much as it has since he moved here in 1969. He has pondered moving to the 10th floor but dismissed it as a waste of money. From his desk he gazes at a Charles Russell oil painting and at a gift from an admirer. The latter is two stuffed and mounted bass, the smaller one nibbling at the tail of the larger.
Here one learns that there are only two ways to do things: Pickens` way and the wrong way.
”A commerical banker said to me once, `Well, there`s not much gray in your life, is there?` And I said `No, thank God, there isn`t. A lot of gray in your life will get you an ulcer. And I don`t have much gray in my life. I see the issues clearly. I know what is the right side and wrong side of an issue. And you never see me on the wrong side.”
Any question that seems to imply, however slightly, that Pickens is not on the ”right side” of an issue elicits an icy blast of disdain. He`ll turn the tables and challenge the questioner. In his autobiography he writes: ”The biggest hurdle in American corporations is the CEO`s ego.” He is asked about his own ego. ”How do you grade my ego on a 1-to-10 scale?” he retorts sharply. When the questioner defers, he scores himself ”less than a five, compared to other CEOs.”
This from a man who just finished writing a 304-page book about himself.
Only one word is sure to spike his normally low heart rate: raider. ”I`m not a raider,” he says firmly. ”A raider to me is (someone) holding a gun against somebody`s head and saying give me your money. We are going in and making huge investments in these situations and asking for changes to make the company more profitable.”
—
Pickens is a man of control. Ask for a few of his friends to interview, and you will receive a typed list of five acceptable candidates. Who is on the list and who is not provokes speculation among Pickens` friends and enemies. Dr. Harold ”Skinny” Watkins` name is not on the list.
”The more you get to know Boone, the more you like him,” Watkins says.
”There`ll be people that think he has horns and a forked tail, but if they want to ante up and hang the linen on the line, they`ll find out he`ll come out pretty good.”
But a former associate says: ”Boone can be very, very unforgiving if he does not like you or have a lot of respect for you. He can be very cold.”
”Boone is very impatient with people who don`t catch on pretty fast,”
says wife Bea. ”He gets impatient with a situation where people don`t do their best, and don`t perform up to their capabilities. Sometimes he gets pretty impatient with me, when I`m not coming up to what I should be.”
—
Boone and Bea Pickens share a lavishly appointed townhome with two goldfish, Bessie the Himalyan cat and Wall Street the parrot. They live well, if not ostentatiously. Pickens maintains that he still wears some of the same custom-tailored shirts he began ordering in 1972, and that his needs haven`t changed much over the years. ”I used to say that if I had two suits, a dark one and a light one, a couple of bird dogs, and a good shotgun, I would be happy,” he wrote. ”Now I seem to need 15 suits, two dozen bird dogs, a good shotgun and a set of golf clubs.” But, he says, ”I could still go back to eating hamburgers if I had to.”
The Pickens home, set around a courtyard, has 20-foot ceilings and a private indoor tennis court. It is filled with Western art, Southwestern artifacts, and the trophies from Bea Pickens` big game hunting, including a Cape buffalo head hanging prominently above the family room fireplace. They also have a 13,000 acre ranch–the 2B Ranch–90 miles from here, where they spend the occasional weekend when Boone isn`t working.
Bea and Boone met in 1950, when they were married to other people. ”He was a big razzer,” Bea recalls. ”I was always kind of scared of him, he`s so quick-witted. I remember he could be pretty caustic.”
Bea overcame her fear and married Boone in 1972. The Pickens have eight children–four by each of their first marriages. ”The easiest thing is to be his daughter,” says Bea Pickens, ”and the toughest is to be his son.”
Pickens has two daughters, Deborah, 37, and Pam, 34, and two sons, Mike, 33, and Thomas Boone III, 30, known as Tom.
”I think that means you`ve got some pretty big shoes to step into,”
says Tom, the only Pickens child willing to grant an interview. The younger Pickens surfaced in the news recently as part of a group attempting to take over a closed-end stock mutual fund called the Japan Fund.
”When I was 14 or 15, my father started both of us boys on investing,”
says Tom, who lives in Dallas. ”He gave us a little money to play with in the stock market, told us where to put it, and we lost our butt every now and then and made some money now and then.” (Mike remains in stocks, as a broker in Dallas.)
After a while, Tom says, his father let them pick their own stocks. ”The deal was we could keep all the profits, but he got his money back first.”
Pickens also absorbed any losses. ”You couldn`t turn that deal down,” says Tom, who learned to trade skillfully enough to substantially put himself through Southern Methodist University.
After college, the younger Pickens started a computer distribution business from scratch–without his father`s help in financing–and sold it two years ago. ”Dad could have made it easier, but I felt I needed to do it on my own,” says Tom, who is well aware of the assets and liabilities of possessing a famous name.
The major asset, he says, is he has inherited his father`s unerring ability to instantly size up people. Even as a 5-year-old child, Tom says, his father would grill him about his impressions of people he`d meet. ”It was like a quiz,” Tom recalls. ”If you didn`t make a proper analysis, he might help you along.”
When Tom flirted with the idea of becoming a professional photographer, his father helped him along by suggesting geology instead.
Tom earned a degree in economics.
None of the children work for Mesa, Tom says, ”because it`s a public company and it`s not a good idea.” But would he like to work for his father under other circumstances? ”No,” Tom says. ”I`m too independent. I like my little world of control, too, and I wouldn`t want to share that.”
—
Boone Pickens was born an only child in Holdenville, Okla., ”a speck in the grand sweep of the Great Plains,” as he describes it, where one learned early of the local expression, ”root hog or die.” (Translation: dig in or fail.) His father was a ”land man,” who would seek landowners willing to lease their mineral rights and then sell the leases to an oil company.
His mother, Grace, decided that her son would be called by his middle name, Boone. ”It was embarrassing to have to repeat my name two or three times before people would understand, and I was afraid that kids might make fun of me. I have been mistakenly called Booner, Ben, Bobby–even Jerome. But my mother saw things differently. `Once people understand your name,` she said, `they won`t ever forget it.` ”
His Aunt Ethel taught Pickens geography in grade school but refused to give him an A, even though he claims his work was as good as the other students`. ”She said I wasn`t living up to my potential.”
Pickens excelled at sports, and at 5 feet 9 was a star guard at Amarillo High School. One of his former teammates has said that Boone was something of a showboat, passing the basketball behind his back, and was also a great prankster, tossing water-filled paper bags from hotel windows.
Pickens married at 20, graduated from Oklahoma State University in 1951 with a degree in geology, and went to work for Phillips Petroleum. He gave his advice to his superiors freely in those days and he was advised that to advance in the company he should ”keep his mouth shut.”
”It was kind of like filling up a milk bottle with water,” he told a reporter of his frustration. ”Right at the last, it fills up real quick.”
After four years at Phillips, he had his fill of the corporate bureaucracy. With a wife, two children and one on the way, he took his life savings and made a down payment of $1,300 on a Ford station wagon to begin his own oil company. He made his first deal in 30 days, netting himself $2,500.
In 1956, with two partners he formed Petroleum Exploration Inc. One of the first who signed on with the new company was Lawton Clark. ”We had three people to start with on the edge of extinction half the time, but Boone could inspire confidence,” Clark recalls. ”He has that knack. He always signed everything T.B. Pickens Jr. to make himself seem older. He was 27. But he seemed a lot older.
”There used to be a guy out of Laredo who said, `Boone kind of lays behind a log, and all of a sudden, he rears up and he`s got you.` There was something about Boone. His appearance wasn`t any better than most. His personality was good. But he knew what he was talking about. I never knew a geologist better prepared than Boone.”
He was not above a prank or two, even in later life. Once, a friend recalls, he and his first wife were meeting another couple for the first time. Pickens informed each woman separately that other was hard of hearing. ”He finally got tired of all the hollering back and forth,” the friend says,
”and he told them what he`d done.” His wife was not amused.
Another time, he took his friend Skinny Watkins on a business trip to Toronto. Pickens told Watkins their destination was San Francisco. ”We landed and he said we missed the Golden Gate,” Watkins recalls. ”Then he sent me to `Fisherman`s Wharf.` I didn`t know I`d been had until they brought the change in Canadian money. I finally told the maitre d`, I said, `Mister, I left Amarillo at 7 this morning and I can`t tell you within 3,000 miles where I am.` ”
—
In 1964, Pickens formed Mesa Petroleum, and over the years, it merged with several other companies. In 1972, Mesa launched an ambitious $1.2-billion oil exploration program. It made major finds in the North Sea, Australia and the Gulf of Mexico. But costs were high and when the price of oil plummeted from $40 a barrel to $10, Mesa lost money just like everybody else.
By 1982, it was apparent that ”if we didn`t hit a home run,” worth about $300 million, ”we would have to scale back the company quite a bit.”
That is when Boone Pickens went company hunting to make some money.
For a while, Boone Pickens was a folk hero: David to Big Oil`s Goliath. In the Gulf deal, for instance, ”people said you took on a big one and kicked them right in the pants, you know, and made things happen,” Pickens recalls, referring to himself often in the second person.
It gets harder and harder, however, for Pickens to remain the underdog. Mesa is one of the largest independent oil and gas companies in the country now, enriched partly by several takeovers that, while unsuccessful, nevertheless added some $500 million after taxes to the company coffers in five years.
His undoing, it seems, was the 1984 bid for Phillips Petroleum. ”They said I was going to make a ghost town out of Bartlesville, Okla., and 38,000 people would be out of work. We said straight away, we`ll move to
Bartlesville, I`ve lived there before. Why that wasn`t understood I don`t know. I mean they had prayer vigils. What did they think we were going to do? That one caused me more problems than any other. I just wish we`d never made the offer for them. It was a pain in the neck.”
Now, he says, no bank in New York or Chicago will lend him money because they are bowing to pressure from major corporations. ”I`ll tell you what I`m tired of,” he says. ”People say I`m the only one who makes money (on these deals). That is absurd. We can clearly say 800,000 stockholders made $13 billion and our part of it was less than 5 percent.
”I think I`ve done a lot of good for this country. I`ve done a lot of good for corporate America, and I`m disappointed that it is perceived differently.” To change those perceptions, Pickens has formed USA (the United Shareholders Association), a lobbying group that he says will crusade for shareholders` rights against what he calls the ”good ol` boys club,” an informal network of CEOs who run large, publicly held companies.
Andrew Sigler, chairman of Champion International Corp., recently wrote that Pickens ”has had a high old time flinging rocks at corporate management and painting himself as an aw-shucks, down-home fella who just wants to help out the little shareholders on the block. Meanwhile he can notch his belt with the companies he has sucked the equity from. He . . . has had a lot of fun bamboozling people . . . into thinking he`s doing the world a big favor.”
It`s all part of the battle, and Pickens, one suspects, secretly relishes the combat.
—
At home, he takes a visitor on a quick tour. He stops and lingers by the wall of fame, a 40-foot hallway covered with proclamations, thank-yous, magazine covers, and autographed editorial cartoons. He has everything from an invitation to his induction into the Amarillo High School Hall of Fame in 1981 to a card that says: ”Please come and get us.” It is signed by ”Texaco employees and stockholders.”
He stops by his favorite cartoon. It says: ”Sure, I know he`s just another cash-clutching corporate mogul . . . I know he`s just a big-time hustler . . . But y`know, when somebody makes those major oil companies leap and squirm and bleat with outrage . . . GOD HELP ME I DO LOVE IT SO.”
”You know who said that, don`t you?” Pickens says, referring to the last line. ”General Patton.”
Pickens turns away from the cartoon, and for the first time in quite a while, there is a hint of a smile on his face.
