Entrenched Corporate Leader: Norman Wesley of Fortune Brands

Norman Wesley, Chairman & CEO of Fortune Brands (FO)

Norman Wesley of Fortune Brands (FO) is probably as dug in as a CEO could be without having any controlling interests.  He doesn’t even own anywhere close to 1% of the stock, yet he is extremely well respected on Wall Street.  As a matter of fact, if he ever decides to leave for private equity or if he wanted to retire prematurely, you would probably see as much as 5% of the value of Fortune Brands disappear on the departure.  He is only 57 or 58 years old, so he is expected to have another 18 to 22 years in running companies and doing deals.  That assumes he wants to.

Fortune Brands isn’t just the liquor and wine company most people think of.  They have the home building products unit, and the Titleist golf brand.  They spun-out the ACCO unit of office products, and that was deemed a win.  They own Jim Beam, Moen, and probably a hundred others.  How does a guy get Absolut vodka essentially for free?

Wesley took the Chairman & CEO role in 1999, and was president and COO before then.  He is also on the board of directors in the outside companies R.R.Donnelley & Sons, ACCO, and Pactiv.  So he gets to see quite a bit of diverse trends in the economy, and Wall Street trusts him.  The stock has been in a slower phase over the last two years, but shares are up more than 100% since he took over and that doesn’t include the ACCO value.  Forbes ranked him as number 150 as far as their 2006 compensation list, and Wall Street would say that he is worth every penny.

It is surprising that private equity firms have not been able to snatch him away from Fortune Brands, particularly since he is supposed to know how to do acquisitions as well as almost anyone.  They could certainly afford him.

As a reminder, here is the link back to the introduction of this CEO segment with the guidelines.

Jon C. Ogg
January 19, 2007