President and CEO, Mirant Corporation
Born: 1960, in Wetumpka, Alabama.
Education: University of Alabama, Tuscaloosa, BS, 1983; Union College, MS, 1984.
Career: General Electric, 1983–1985, applications engineer; Alabama Power (subsidiary of Southern Company), 1985–1988, staff engineer; Southern Company, 1988–1990, corporate finance senior analyst; Southern Company Services (subsidiary of Southern Company), 1990–1992, assistant to the chief executive officer; Mirant, 1992–1994, international project director; 1994–1997, senior vice president and then executive vice president of North America division; 1997–1998, president and chief executive officer of North American energy marketing; 1999–, president and chief executive officer.
Awards: Named one of the 50 Most Powerful Women in Business, Fortune , 2001.
Address: Mirant Corporation, 1155 Perimeter Center W., Atlanta, Georgia 36338; http://www.mirant.com.
■ S. Marce Fuller was one of very few female CEOs at the helm of a U.S. Fortune 500 company in the early 2000s. She became president, chief executive officer, and a member of the board of directors of Mirant, a Georgia-based energy provider, in July 1999. In 2001 she was named to Fortune magazine's list of the 50 Most Powerful Women in Business, ranking fifth. She took over when Mirant was a subsidiary of Southern Company, but under her direction the company acquired a trading and marketing branch and in April 2001 was spun off from the parent company. By year's end, Mirant had become Georgia's eighth-largest company and one of the top five marketers of natural gas and electricity in the United States. In addition to operations in the United States, Mirant also had dealings in the Caribbean and the Philippines and owned or controlled in excess of 22,000 megawatts of generating capacity worldwide. Fuller was perceived by associates as a capable, straightforward, and resilient executive.
Fuller grew up in Wetumpka, Alabama, wanting to manage a small business. Her grandmother was her role model. In 2001 she told Utility Business , "If there was anyone that I looked up to, it was my grandmother. She seemed to be way ahead of her time." Following advice from a guidance counselor in high school, Fuller decided to forgo her original plan and pursue engineering.
In 1983 Fuller graduated from the University of Alabama with an undergraduate degree in electrical engineering. She earned her master's degree in power systems engineering at Schenectady's (New York) Union College. Before completing her master's, in 1983 Fuller was hired as an applications engineer at General Electric. In 1985 she became a staff engineer in electric system planning for Alabama Power, one of Southern Company's regulated operating companies. One of her tasks in that position was supporting negotiations for the long-term sale of wholesale power to unaffiliated utilities.
Fuller was hired as a senior analyst at Southern Company in 1988, even though she had been warned against taking the job because it was considered a lateral career move. In an article in Georgia Trend (December 2001), she admitted that it had been a risky choice, but she said it had been motivated by a desire to learn about a different area of the company (corporate finance, where she evaluated independent power projects to determine their investment potential) and was "probably the best career move I ever made." In 1990 Fuller became the assistant to the chief executive officer of Southern Company Services, a subsidiary of Southern Company. She managed a number of special projects, among them the development of a strategy for entering the international power market via the company's subsidiary, which eventually became Mirant Corporation.
Throughout her stints in engineering, marketing, international project development, finance, and executive management at Southern, as well as during her subsequent career at Mirant, Fuller scrutinized and learned from her colleagues' management techniques. In the Georgia Trend article, she said, "Whenever I'm working with or for someone, I'm studying their style and behaviors. I try to pick out the ones that I think are the best and emulate them. I'd like to think that I've gotten the best from all of them."
In 1992 Fuller went to work for Mirant Corporation, a subsidiary of Southern Company, as an international project director. Her responsibilities centered on business development in Australia, New Zealand, the Caribbean, and Latin America. In 1994 she was promoted to senior vice president and later to executive vice president of Mirant's North America division. She oversaw all aspects of management and asset development, including financial performance, financing strategy, environmental compliance, operations, and construction. In 1997 Fuller became the president and chief executive officer of the newly created North American energy marketing business, which serviced wholesale North American customers by providing energy marketing, risk management, and financial services and physically delivering energy commodities to them.
In July 1999 Fuller became president, chief executive officer, and a director of Mirant. Under her direction, the subsidiary acquired a trading and marketing branch and, in April 2001, was launched from its parent company. Fuller's daring assessment of a future filled with nonstop opportunities fueled Wall Street's excitement over the newborn entity. In a letter to shareholders even before the company had separated from its parent company, she predicted Mirant would achieve a market value of $50 billion, experience exceptional growth, and perhaps surpass Southern Company in five years. Company profits soared, and Mirant's share price in May 2001 rocketed from $22 to $47.20.
By the end of the year Mirant had become Georgia's eighth-largest company and one of the top five marketers of natural gas and electricity in the United States. In 2001 Fuller was named to Fortune magazine's list of the 50 Most Powerful Women in Business, ranking fifth (two spots behind Oprah Winfrey). In December 2001 Fuller was named chairperson of the newly formed Department of Energy's Advisory Board, just months after Mirant announced that its earnings from the third quarter had more than doubled from that of the same period the previous year and coinciding with Fuller's appointment to the board of Earthlink.
Then the Enron bankruptcy and accounting scandal hit the news, and the entire energy sector was affected by the fallout. In less than a year Mirant's stock price declined about 80 percent, and Moody's Investors Service downgraded the company's credit rating to junk status. Credit became hard to come by, and Mirant was forced to adjust its growth plan, cutting its capital budget by 40 percent and selling some assets. The company's energy-trading business came to almost a complete halt. Fuller and other of Mirant's senior managers took great pains to position Mirant as the "un-Enron." According to Fuller, it was Enron's business practices and corporate culture of greed and secrecy that had led to its downfall, and that had nothing to do with the energy business itself.
There were a few prominent similarities between Mirant and Enron: both engaged in a controversial accounting practice of recording the total value of commodities traded as revenue, which serves to inflate revenue figures, and both employed the beleaguered accounting firm Arthur Andersen as consultant and auditor. But while Enron was alleged to have established hundreds of covert partnerships to conceal escalating debt, Mirant was commended by Wall Street analysts for its transparency in releasing financial data. And in contrast to Enron executives, who dumped millions of dollars worth of shares before the company's collapse, Mirant executives purchased Mirant's plummeting shares. Perhaps the greatest difference between Enron and Mirant was that the former mostly traded energy and other commodities generated by others, while the latter marketed electricity produced by its own power plants.
As a result of significantly volatile conditions in California's wholesale power markets in the summer and fall of 2000, some of that state's utilities were unable to meet financial obligations to many power generators, including Mirant. Pacific Gas and Electric Company and the California Power Exchange Corporation each filed for relief under Chapter 11, and Southern California Edison Company suspended payments to various power generators. While the amounts were in dispute as of July 2003, Mirant estimated that it held some $320 million in claims as a result of the California utility crisis, as well as another roughly $82 million in claims against Enron, which filed for bankruptcy in 2001. Beginning in July 2002 Mirant developed and implemented a strategy that included measures to reduce debt and increase liquidity, such as the sale of investments in Europe and Asia, the cancellation of the purchase or sale of power islands and turbines not essential for Mirant's ongoing business, the reduction of Mirant's workforce by some 655 employees, and the sale of some Canadian assets. Despite the success of these moves, Mirant had roughly $1.4 billion of cash and available credit in April 2003, yet it faced approximately $4.5 billion of near-term debt repayments.
In July 2003 Mirant filed for bankruptcy. The company's operations in the Philippines and Caribbean were excluded in the Chapter 11 filings. The bankruptcy was filed to facilitate a comprehensive restructuring and reorganization of the company, and Fuller said worldwide operations would continue uninterrupted and Mirant's vendors would be paid in full for all services provided and goods furnished after the filing date. Before the filing, Mirant was in negotiations with its bondholders and bank lenders to refinance its existing credit facilities and restructure a large portion of its debt, but Fuller said "failure to obtain the timely support of our key lenders" led to uncertainty in the marketplace, which strained the company's liquidity and jeopardized the viability of its business plan. That, combined with doubt about when power prices would recover and the sluggish U.S. economic recovery, led the company to conclude that bankruptcy was the best option for its stakeholders. On the day of the bankruptcy filing, Fitch Ratings downgraded Mirant's ratings on senior notes and convertible senior notes to DD from CCC, indicating Fitch's expectation of likely recoveries in the range of 50 percent to 90 percent; Mirant's convertible trust preferred securities were lowered to D from CCC, indicating a potential recovery below 50 percent.
Under Fuller's direction, Mirant became competitive in the energy market. As of 2004 Mirant owned or controlled in excess of 22,000 megawatts of generating capacity worldwide. Fuller had a stated commitment to acting with integrity and honesty in conducting business, an approach that was characterized in "The Mirant Mindset," company values that emphasized that the manner in which results are realized equal the importance of the results. Fuller put a high premium on the nonmonetary rewards of success, such as ongoing opportunities to learn new things. Despite the uncertain future of her company, Fuller was perceived as a capable, straightforward, and resilient executive.
See also entries on General Electric Company and The Southern Company in International Directory of Company Histories .
"Bankruptcy Creditors' Service Newsletter," July 15, 2003, http://bankrupt.com/mirant.txt .
"Caught in Enron's Undertow," BusinessWeek Online , February 5, 2002, www.businessweek.com/bwdaily/dnflash/feb2002/nf2002025_1840.htm .
"Fitch Ratings Downgrades Mirant Corp." Atlanta Business Chronicle , July 15, 2003, http://atlanta.bizjournals.com/atlanta/stories/2003/07/14/daily17.html .
Hardin, Marie, Georgia Trend , December 2001, pp. 41–45.
"Twenty Industry Leaders," Utility Business , June 1, 2001, pp. 60–86.
—Amanda de la Garza