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Pickens has contempt for what he calls the entrenched managers who run Big Oil. He views them as high-salaried hired hands who care more about maintaining their jobs than improving stock value for their shareholders. Says he: "Chief executives, who themselves own few shares of their companies, have no more feeling for the average stockholder than they do for baboons in Africa." Pickens calculates that, as a group, officers of the energy giants own just three-tenths of 1% of their firms' shares. (Pickens owns 2.2% of Mesa.) Since they have relatively small investments in their corporations, he argues, oil executives have tended to let stock prices languish. "It infuriates me," he says, "to see them invest their own money in Treasury bills rather than work to improve the value of their companies' stock." According to John S. Herold Inc., an appraiser of oil companies, shares of major energy firms are currently trading at about 45% of what the corporations would be worth if they were broken up and their assets sold separately.
Pickens claims that inept management can be found everywhere among the large oil firms. He zestfully points out that petroleum companies made four of the seven acquisitions that FORTUNE magazine rated last year as the worst of the past decade (examples: Mobil's $1.86 billion purchase of Marcor, the owner of Montgomery Ward; Standard Oil of Ohio's $1.77 billion acquisition of Kennecott). Many firms are now unloading some of their unattractive operations. Exxon is trying to sell its office-products business, and Atlantic Richfield recently took a $785 million write-off on its stake in Anaconda.
Some of Pickens' hostility toward his gargantuan rivals stems from frustration. "Big Oil is a club," says he, "and they'll do everything to keep me out." That can sometimes seem to include snubbing him at social gatherings. The chairman of one oil giant, a former friend, now looks the other way when he runs into Pickens at industry meetings.
Oil industry executives are as tough on Pickens as he is on them. "He's only after the almighty buck," says G.C. Richardson, a retired executive of Cities Service. He's nothing but a pirate." Gulf Chairman James Lee accuses Pickens of "hit-and-run tactics." Says Chevron Chairman George Keller: "Pickens does not break any laws doing what he does. But he breaks tradition." Many oilmen are reluctant to discuss Pickens publicly for fear of drawing his attention to their companies. Says one executive: "They want to let sleeping dogs lie."
Critics dismiss Pickens' defense of shareholder interest. Says Harold Hammer, the Gulf executive vice president who directed his company's effort to thwart the Texan: "My only objection to Pickens is the aura he tries to create when he says he is for the small shareholder. That's just a lot of crap." Says Senator Howard Metzenbaum, an Ohio Democrat: "Pickens makes a crusade out of what he's doing because he can make a lot of money." Many critics have labeled Pickens a greenmailer, a charge he hotly denies. The term describes a type of corporate blackmail in which a big investor buys up stock and threatens to take over a company. His real intention, though, is solely to scare management so that it will buy back his shares at a price that is higher than the market value of the stock and thus not available to other shareholders.