Retiring Suncor CEO Rick GeorgeJaime Hogge
The Rick George era in the Alberta oil patch began in 1991 when a Colorado-born energy executive arrived to help rescue woebegone Suncor. The company's most intriguing asset was a costly oil sands venture at a time when crude prices were mired near a lowly $20 (U.S.) a barrel. More than two decades later, the oil sands are a colossus and George, 61, is retiring as CEO of the company he placed at the centre of that massive, controversial development. Along the way, he took some huge chances and pulled off a monster merger with Petro-Canada in 2009.
When you joined Suncor as a 40-year-old, did you know it would be this big? Suncor would have been at the bottom of the list of companies you could expect to become one of the biggest in Canada. When we went public in 1992, we had a market cap of just north of $1 billion, and now the company is worth north of $50 billion. We didn't start with that vision. The first chore was to make Suncor viable and then to attract capital and make it an independent Canadian company. When I arrived, it was 75% owned by Sun Co. of the U.S.
How do you last 20 years in the same CEO job? The key is to start young. Really, it's to surround yourself with great people and a great set of assets. There's a lot of luck involved with anything, but we had a very good strategy and we stuck with it for 20 years. I wish our stock price was higher now, but it's a powerhouse of a company with a great future.
What are you going to do in retirement? I'm a big outdoor person. I do a lot of hunting, fishing, skiing, bike riding and golf. But I'm not leaving the oil patch. Once I'm done at Suncor, I'll go back in and look at where the opportunities are. I'll stay in Calgary, and I'll stay connected. I'm an oil patch guy and that's kind of what I do.
Would you be a CEO again? I'm not ruling out anything, but I'll stay connected in a different way. The nice thing about retiring as CEO at 61 is that I have a lot of energy left and I know this industry well.
Did you set the time of your exit well in advance? As a CEO, it's good to be able to pick your moments. You don't want to do a RIM or something else like that. The company is in great shape; the new management team will do a terrific job. I guaranteed our chairman I would stay for three years after the Petrocan merger. I feel great about how the company has come together since the merger.
Why is Suncor's share price still substantially lower than it was before the 2008 market meltdown? It's the direct result of the merger. We paid a premium to acquire Petrocan, and it always takes a while after you do those mergers to get the costs out, drive efficiencies and get the cash flow going. Last year we generated nearly $10 billion of cash flow. The stock will follow—it's just a matter of time. Looking ahead, Suncor is not a high-risk company and it has the cash flow to grow, increase dividends and, if needed, buy back shares.
Do you have unfinished business? I look back on a career like this and think, "I wish I had done things faster." But hindsight is like that. Listen, if you take a company from $1 billion to $50 billion in 20 years, you don't have too many regrets.
What was the darkest hour? The safety incidents have always been an issue. And there were a few fatalities in my tenure. Those problems are somewhat typical of our industry, but they are really dark moments. There's no way we can accept them as we go forward.
How do you stay cool under that pressure? I always felt if you work hard and know your industry and your business, you make the decisions and live with them. I know other people who see the things we did as big gambles, but I don't agree with them. It's a calculated thing, if you know what you're doing. I'm a guy who does not fret a lot about what has happened in the past or where we are now. Hard work and determination usually win out in the end.