Pipeline Boss, 74, Is ‘Not Going Anywhere’ After Getting Co-CEO

(Bloomberg) -- Enterprise Products Partners LP’s 74-year-old boss Jim Teague played down expectations of his retirement after the pipeline company named a co-chief executive officer.

The Houston-based company on Thursday elevated Chief Financial Officer Randy Fowler, 63, to serve as co-CEO alongside Teague, a move that appeared to indicate a succession plan is in place.

But Teague said on the company’s fourth-quarter earnings call that thereshuffle wasn’t a transition toward his retirement.

“As far as I’m concerned, I’m not going anywhere,” Teague said. “I’m really not convinced that my runway isn’t as long as Randy’s.”

The leadership rejig comes as Enterprise faces questions over its structure as a master limited partnership. Many of its peers in the pipeline industry have converted to corporations, and Fowler said last year that such a move may be “inevitable” for the company. Pipeline partnerships began to lose their appeal after the slide in oil prices that began in 2014 sparked cuts to cash distributions. The investor exodus accelerated in 2018 after a series of changes in U.S. tax policy.

Fowler will continue in his role as CFO, and he and Teague will remain on the company’s board. “We complement each other,” Teague said.

“While they will jointly be responsible for all aspects of the partnership, Jim’s principal focus areas will continue to be the commercial, operations and engineering functions, while Randy’s will be the finance, accounting, information technology and risk management functions,” Randa Duncan Williams, chairman of Enterprise’s general partner, said in a statement.

It’s “logical” for Teague to have a reduced role over time, Hinds Howard, a portfolio manager at CBRE Clarion Securities LLC, which owns Enterprise shares, said prior to the call. It’s “not a surprise Randy is the guy,” he said.

Enterprise fell 4.3% to $26.13 at 10:53 a.m. in New York. The company reported adjusted earnings for the fourth quarter that met analysts’ estimates, and said it will spend 2% of its cash flow from operations to buy back stock in 2020.

For more on Enterprise’s earnings, click here

Teague was named CEO in December 2015. He joined the company in 1999 after a 23-year career at Dow Chemical Co. and had previously worked for companies formed by Dan Duncan, the founder of Enterprise and one of the richest people in Texas when he died in 2010. Randa Duncan Williams is Dan’s daughter.

Teague was notably absent from the company’s analyst event in April of last year after breaking three ribs while “acting as a chauffeur for his two tween stepkids, enthusiastically cheering at both middle school baseball and softball tournaments,” Duncan Williams said at the time. It was the first time Teague missed an investor day since taking the reins at the end of 2015.

“Enterprise has never been a job for me,” Teague said on Thursday’s call. “It’s a calling.”

Fowler was named president and CFO in August 2018 after previously serving as a director of the company’s general partner and the co-chairman of its capital projects committee.

--With assistance from Christine Buurma.

To contact the reporters on this story: Rachel Adams-Heard in Houston at radamsheard@bloomberg.net;David Wethe in Houston at dwethe@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Christine Buurma

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