BC Business
When Terasen was sold for $6.9 billion to U.S. pipeline giant Kinder Morgan in November, Pat Lloyd, former senior VP of HR and government affairs for Terasen Gas, began writing up purchasing agreements, termination contracts and preparing employees for the shock of unemployment.
Those who made the cut now answer to the hard-boiled, no-bullshit head honchos back in Texas (who immediately sold off the company’s water and utility services to CAI Capital Management for $125 million in January). Those who didn’t dodge the axe are living la dolce vita thanks to stock options and generous severance packages. Guess which group Lloyd ended up in. What’s it like doing business with Texans? They’re so straightforward. Quite often, people try so hard to be tactful that in the end,you don’t know what the hell they’re saying. Texans aren’t like that. If you say, ‘Gee, that doesn’t sound so great for me,’ they’ll say, ‘Yeah, well, that’s the way it is.’ It was a bit surprising at first. It was like, ‘Who are these people?’ What about their views on running a big energy company? They believe more in incentives and they don’t pay high salaries at the senior level. Nobody gets more than US$200,000. But they’re very aggressive about getting shares into the hands of employees. They subsidize you when you buy them. There are a lot of very wealthy employees at Kinder Morgan.
Does that mean some local Terasen employees will see their paycheques take a hit? Their low-salary approach is more for executives. Their approach to non-executives is whatever the market requires. How do you think Terasen employees feel about answering to George W. Bush’s compatriots? Canadians are a lot more concerned with the political stuff than Americans. The more you sit with them, the more you realize these people are just like us. We’re all just trying to do business. What did the redundancy numbers look like after the sale? Because Kinder Morgan’s in the U.S. and we’re in Canada, there was very little overlap. So we had very, very few layoffs coming out of this. We’ve only written about 40 termination letters, and almost all of those were in the corporate group which had about 50 people, rather than the utility divisions that have thousands of employees. Did you survive? I’m one of the five executives who don’t have what they call a ‘go-forward’ role. There was our CEO, CFO, general counsel, myself and one other. I’ve stayed on a bit longer to wrap up all of the people issues and I’ll be out in a couple of weeks. I bet they handed you a sweet severance package. All of the executives got 24 months’ worth of severance in a lump sum. It’s kind of like, “Thanks for 26 years. Here’s two years’ notice and get out of here.” Stock options? We had to sell our options to Kinder Morgan as part of the agreement. They paid almost $36 a share, and not that long ago these shares were $7. I got quite a large amount because I had options over years and years. Care to tell me how much? I’m not exactly sure, because I’m just doing all the tax planning and pulling it all together. But it was more than $1 million. So you’re taking early retirement. That’s what I’m telling everybody. But actually, I’m just doing what these outplacement people tell you to do: take three or four months, focus on your family for a little while and pull your energy back together. Then see what’s out there. Are you excited? It’s a bit disjointing. I’ve been here 26 years. Have you splurged yet? Unlike the other executives, I still have two kids in high school and one finishing up first-year university. At Christmas, we went to the Caribbean on a sailboat and sailed the Grenadines as a family. When the batteries in the Gameboys run out, the kids have to talk to you, right? Future plans? When my daughter finishes her first year of university in April, we’re going to backpack around Europe together. Then, when my boys get out of high school, we’re going to go climb the Rockies. Are you tempted to start in a whole new direction? At 54 it’s hard to build a new career, and I don’t want to put in more than another five years. I don’t want to call myself an activist, but I’m very interested in the environment. I’ve always been able to blame my job for all the things I haven’t been doing. I don’t have that excuse anymore.