National Oilwell Varco Inc. (NOV:US), the largest U.S. maker of oilfield equipment, is promoting two of its top executives as part of Chief Executive Officer Pete Miller’s plan to strengthen the company’s management bench ahead of his eventual retirement.
Miller, 62, said he will remain chairman and CEO while relinquishing the position of president, along with its day-to- day operational duties, to Chief Financial Officer Clay Williams. Williams, 50, also will become chief operating officer. Jeremy Thigpen, 38, will succeed Williams as CFO, moving from his current role as head of the company’s downhole pumping and solutions group.
National Oilwell Varco said the changes will take effect immediately, according to a statement today. Miller, who also serves on the board of Chesapeake Energy Corp. (CHK:US), didn’t say when he planned to retire.
When he does leave, “My successor will come from inside this company,” Miller said in an interview at his Houston office earlier this week. “I’m setting this up to be a very effective management team.”
Williams joined the company in National Oilwell Inc.’s 2005 takeover of Varco International Inc., where he was chief financial officer. Thigpen joined the company after his graduation from Houston’s Rice University in 1997.
“They may have set up a nice long line of succession here,” James West, an analyst at Barclays Capital in New York, said in a telephone interview. He rates the shares at overweight, which means investors should buy the stock, and owns none. “Clay is going to do an excellent job when he eventually does succeed Pete as CEO.”
Miller’s retirement isn’t expected “anytime soon,” James Crandell, an analyst at Dahlman Rose, wrote in an e-mail.
Miller joined National Oilwell in 1996, serving as president of the company’s products and technology group before becoming CEO in 2001.
During his 11 years as CEO, Miller expanded National Oilwell’s international sales of offshore rigs and oilfield gear through 28 acquisitions valued at almost $16 billion, according to data compiled by Bloomberg. The company, which today is benefiting from a boom in demand for ultra-deepwater drilling rigs, is waiting to close the $2.54 billion purchase of Robbins & Myers Inc. (RBN:US), a maker of blowout preventers for rigs.
“When you look at the history of CEOs, 11 years is a hell of a long time,” Miller said. “I’m having fun. I enjoy what I’m doing. I think I do it pretty well.”
An investment in National Oilwell would have almost quadrupled from when Miller took over, compared with a 13 percent gain in the Standard & Poor’s 500 Index and a doubling of the S&P Energy index.
“There’s very few companies that can match our performance,” he said.
Miller has worked closely with both men in recent years and all three have a history on the college gridiron. Miller, who played defensive lineman for the U.S. Military Academy, personally hired Thigpen, who played on the offensive line at Rice University in Houston. Williams played football while he attended Princeton University in New Jersey.
“I like jocks,” Miller said. “They’re competitive. If you’re good in business, you gotta be competitive.”
The executive promotions show “I’ve got a lot of confidence in these two guys,” Miller said. “But I’ve got a lot of confidence in other people within the company as well.”
The person chosen to ultimately succeed him as CEO will be a board decision, “not a Pete Miller decision,” he said.
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