The Rising Influence of Rising Affluence

[Rocky3]

From Barron's:

http://online.barrons.com/articles/seeing-the-forest-and-the-trees-at-plum-creek-timber-1420872951

In part:

“The focus here is on how do we maximize the value of the enterprise—not make it bigger, but make it more valuable,” he says.

The aim, he adds, is to be a good steward of the company’s assets for “all of its stakeholders, not just shareholders, but the communities and the customers,” as well.

It’s a delicate balancing act that isn’t always easy to negotiate, but Holley manages time and again to find common ground among different interest groups, ranging from environmentalists to shareholders to the federal government.

At 63, Holley is one of the longest-serving corporate leaders in the country. That puts him in a select cadre that includes Berkshire Hathaway ’s (BRKA) Warren Buffett and Rupert Murdoch of Twenty-First Century Fox (FOX) and News Corp (NWSA), which owns Barron’s. Both are at least 20 years Holley’s senior. Holley owes his longevity at the top of Plum Creek to the innovations he has wrought, the strong returns he has delivered, the consistency of his performance, and the confidence he has engendered among investors. During his tenure in top management at Plum Creek, the stock has delivered an annualized return, including reinvested dividends, of 14.4%, compared with 9.6% for the Standard and Poor’s 500 index.

“The company hasn’t wobbled or suffered from excesses, and few companies can say that,” says Richard Bressler, 83, the former chief executive of Burlington Northern Railroad, of which Plum Creek was once a part, and the man who hired Holley in 1983 to be a corporate auditor. “Plum Creek hasn’t had any major hiccups during his tenure, a record very few CEOs have achieved. I follow his career in that I continue to own stock in the company, and he continues to be a very steady performer.”

Tied to the fortunes of the housing market, Plum Creek has found the going tougher since the global financial crisis and housing bust of 2008. Earnings slipped in 2010 to $1.24 a share from the prior year’s $1.44, and fell to $1.19 in 2011 before rising again.

Nor have the company’s shares kept pace with the broader market’s gains in recent years. The stock is down just over 1% in the past 12 months, to a recent $43.67, compared with an advance of 12% in the S&P 500.

Reflecting his disappointment in the stock’s performance, Holley recently returned a restricted-stock award of 44,445 shares granted to him last February that was scheduled to be fully vested in February 2017, saying in a government filing he was undeserving as long as shareholders hadn’t seen an increase in their investment return. (The restricted shares are worth nearly $2 million at the current quote.) Still, he is “fully committed to Plum Creek and intends to lead the company through this challenging and prolonged economic cycle.”