Chief executive officer and president, Conseco
Born: February 9, 1948.
Education: Northeastern University, BA, 1970; MA, 1972.
Career: Coopers & Lybrand (now known as Pricewaterhouse Coopers), 1974–1993, held several positions, eventually becoming senior partner and vice chairman; Bank of Boston, 1993–1996, vice chairman and CFO; BankBoston (now merged into FleetBoston Financial Corporation), 1996–1998, vice chairman and CFO; DeMoulas Super Markets, 1998–1999, board chairman; View Tech, 1999–2000, CEO; Conseco, 2001–2002, president and COO; 2002–, CEO and president.
Address: Conseco, 11825 North Pennsylvania Street, Carmel, Indiana 46032; http://www.conseco.com.
■ William J. (Bill) Shea, who first earned his turnaround stripes at the Bank of Boston in the 1990s, proved he could pull off another rescue when he led financially troubled Conseco through the maze of reorganization under Chapter 11 of the Bankruptcy Code in only nine months. The fact that as of the fall of 2002 Conseco's Chapter 11 filing was the third largest in U.S. history, surpassed only by those of WorldCom and Enron, made this accomplishment particularly noteworthy.
Although Conseco's plan for reorganization received the stamp of approval from U.S. Bankruptcy Court Judge Carol Doyle in September 2003, Shea's work was far from over. The company, based in Carmel, Indiana, had first found trouble when it attempted to branch out from its core insurance businesses into consumer finance. With that costly misadventure behind it, Conseco's newly streamlined insurance subsidiaries needed to quickly increase profitability in order to earn improved financial-strength ratings from such insurer-rating services as A.M. Best. Shea cautioned investors and analysts against reading too much into Conseco's report of an $18.9
million profit in October 2003, suggesting that the figure amounted to too little data for too short a period upon which to base a proclamation of recovery. As he told the Indianapolis Star , "It's been a hectic 12 months that we've all been through. But we plan to prove over the next few years that it was all worth it" (November 20, 2003).
In November 2003 Shea set a goal for Conseco of annual profit growth of between 7 and 10 percent. He predicted such growth could be achieved through a combination of increased sales of its core insurance products and reductions in costs. Much of Conseco's hopes for long-term recovery were pinned on its most profitable insurance unit, Bankers Life & Casualty, based in Chicago. Some doubts about the soundness of Conseco's recovery plan arose in mid-February 2004 when Edward M. Berube, the president and CEO of Bankers, abruptly resigned following a brief meeting between Shea and Bankers' senior management. What, if anything, his resignation would mean for Conseco in the long run at the time remained uncertain.
Born in New England on February 9, 1948, Shea earned his bachelor's degree in economics at Northeastern University in 1970. He continued his studies at Northeastern until 1972, when he received his MBA. He began his business career at the international accounting firm of Coopers & Lybrand (which in 1998 merged with Price Waterhouse to form Pricewater-house Coopers) in 1974. Over the next 19 years, Shea held a series of jobs of increasing responsibility at Coopers, rising eventually to senior partner and vice chairman. In his final years at Coopers & Lybrand he was responsible for the accounting firm's National Industry Programs, which were involved in marketing services to Coopers's two hundred largest customers. During this period he focused largely on companies in the high-tech and financial-services sectors.
In 1993 Shea, who had worked closely with the Bank of Boston during his years at Coopers, joined the bank as vice chairman and CFO. Long a major commercial banking institution, the Bank of Boston had established a far-flung network of global subsidiaries and enjoyed a strong reputation as an industry leader. By the early 1990s, however, the bank's lack of a strong franchise in consumer-banking activities was beginning to be reflected in the company's financial performance. To further enhance the bank's areas of strength and beef up its weaker sectors, Shea helped engineer the acquisition of the Boston-based BayBanks in a $2 billion stock merger. When the merger was finalized in 1996, the product—BankBoston—combined the Bank of Boston's international presence and corporate sophistication with BayBank's consumer innovation and world-class technology. (In 1999 BankBoston merged with Fleet Financial Group of Boston to create FleetBoston Financial Corporation.)
Within the corporate structure of the newly created BankBoston, Shea retained his titles of vice chairman and CFO and was assigned responsibility for global banking and finance. In those roles, as the BankBoston CEO Chad Gifford told the Boston Herald , Shea's "tenacity and drive helped us to engineer a dramatic improvement in our operating performance and market valuation" (July 11, 1997). After five years with BankBoston and its predecessor company, Shea decided it was time to pursue new opportunities. He told the Boston Herald he was looking for a smaller, more entrepreneurial firm that might be able to use his services. "I'd like to see if I can really run a company. At 49 years old, if you're not going to do it now, when are you going to do it?" (July 11, 1997). Although some outside observers speculated that Shea might have been forced out of BankBoston because he had served as a director for scandal-tainted Centennial Technologies, the high-tech company based in Billerica, Massachusetts, Gifford denied that such was the case.
The Centennial scandal, which erupted when the company was charged with securities fraud for overstating its financial results, did slightly besmirch Shea's otherwise spotless record. The company agreed in 1998 to reimburse almost $18 million to investors who claimed they'd been defrauded, and three of those involved in the scandal, including the CEO Emanuel Pinez, spent time in jail. In 2000, after the Securities and Exchange Commission issued a report charging Pinez and the former CFO James Murphy with orchestrating a "massive fraud," Shea called it "a painful public reminder of a difficult chapter in the history of our company" (September 27, 2000), according to a story that appeared on Boston.Internet.com. Business Week chastised Shea in print, suggesting that, as a director of Centennial and a top executive with the troubled firm's principal lender, he should have realized that something was amiss.
In April 1998 Shea replaced the founder Robert G. Hatfield as the CEO of View Tech, a leading provider of video, voice, and data solutions with offices in both Camarillo, California, and Boston. Under Shea's direction, View Tech launched a major restructuring plan designed to cut costs and increase profitability by shutting down marginal or unprofitable operations and streamlining and integrating those operations that continued to exist. In announcing implementation of the restructuring plan in July 1998, Shea said that as a result the company was poised to become a leader in the market for voice, video, and data communication services.
In October 1999 Shea and the View Tech President Franklin A. Reece III removed themselves from the day-to-day operations of the company when a decision was made to centralize View Tech's operations—including all administrative functions—to Camarillo. Because neither Shea nor Reece was able to relocate at the time, the company announced the appointment of S. Douglas Hopkins as interim president and CEO. Although Shea remained with View Tech through 2000, his role in the company's direction was significantly reduced. During this period he also served on the board of Demoulas Super Markets, a chain of 57 stores based in Tewksbury, Massachusetts.
For Shea, the biggest challenge of all lay just ahead. In September 2001 Gary Wendt, the chairman and CEO of financially troubled Conseco, announced Shea's appointment as president and COO and a member of the office of the CEO. Before coming on board as a full-time employee, Shea had worked as an outside consultant for Conseco and was well aware of the company's difficulties, which had it teetering on the edge of bankruptcy. Explaining the decision to add Shea to the company's top management, Wendt said, "Bill Shea is a perfect fit for us. His experience in turnaround situations is unsurpassed, and he can provide senior leadership across many business functions," according to a Conseco press release (September 25, 2001).
Conseco had gotten itself into trouble in the 1990s when it embarked on a frenzied shopping spree for acquisitions, amassing a huge debt load in the process. According to many observers and market analysts, the straw that broke the camel's back was Conseco's 1998 purchase of Green Tree Financial Corporation, the largest U.S. lender to buyers of mobile homes, for $6 billion. The company's latest attempt to diversify proved to be its undoing, for it failed to realize the riskiness of the venture into the realm of consumer finance. Conseco set up its newly acquired consumer-finance operation as a subsidiary entitled Conseco Finance Corporation.
In early October 2002, less than 13 months after he joined Conseco, Shea was given the added responsibilities of CEO by Wendt, who remained Conseco's chairman. Two months later Conseco and a few of its key subsidiaries, under Shea's direction, filed for protection from their creditors under Chapter 11 of the U.S. Bankruptcy Code. At the same time, the company announced that it had reached a tentative agreement with its banks and bondholders on a financial restructuring plan that would sharply reduce Conseco's debt. The plan called for Conseco to spin off its noninsurance operations—most notably Conseco Finance Corporation—so that the core company would return, after reorganization, to being a purely insurance-oriented business.
In the nine months following its Chapter 11 filing, Shea worked diligently to hammer out and implement various elements of the company's reorganization plan. On September 10, 2003, Conseco announced that its sixth amended joint-reorganization plan had been approved by the U.S. Bankruptcy Court and was now in effect. On January 29, 2004, Conseco filed a registration statement with the SEC for the offer and sale of $800 million in common stock and $350 million in a new class of mandatorily convertible preferred stock. Although Conseco faced a wide array of challenges in the days ahead, it appeared by early 2004 that the company had embarked on the road to recovery.
Away from his responsibilities at Conseco, Shea was active in both industry and civic affairs. He continued to serve on the board of DeMoulas Super Markets as well as that of AIG/Sun America Funds. He was also a member of the Massachusetts Society of Certified Public Accountants, the Financial Executives Institute, and the American Institute of Certified Public Accountants. He once served as a trustee of the Children's Hospital in Boston.
See also entry on Conseco Inc. in International Directory of Company Histories .
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