Selection of Shepard is a pleasant shocker

Few Americans have ever headed a major European institution

November 09, 2001|By Paul Adams | Paul Adams,SUN STAFF

The man chosen as the new head of Dutch insurance conglomerate Aegon NV is described by colleagues as a brilliant financial analyst, consummate delegator and political pragmatist who can negotiate a billion-dollar merger one day and discuss fly-fishing and hunting with local guides the next.

But the thing that caught the attention of the world financial community most yesterday was that Donald J. Shepard is from the United States - Baltimore, in fact - making him one of just a few American executives in recent memory to be named to the top post of a European financial institution with worldwide reach.

Because Shepard is expected to divide his time between Baltimore and The Hague, the appointment means that Maryland will likely remain the beneficiary of Aegon's corporate philanthropy, which has extended to numerous civic and political institutions over the years, business leaders said.

"In the annals of business, this just doesn't happen," said H. Furlong Baldwin, chairman of Mercantile Bankshares Corp. and a longtime friend and colleague of Shepard's. Shepard has served on Mercantile's board of directors since 1992, shortly after he arrived in Baltimore to head Aegon USA Inc.

Baldwin, echoing the comments of many analysts, said, "The compliment to him is that he is an American heading up an old, old-line European insurance company."

Aegon announced yesterday that Shepard, 55, will take over in April for the retiring Kees J. Storm as chairman of the company's executive board. Storm told the Dow Jones News Service that the transition will go smoothly, though there may be differences in the two executives' style. Storm has been known to put the emphasis on "fun" while moving aggressively to grow the business through acquisitions.

"Shepard comes from sales and he'll bring along that spirit," Storm said at a news conference in The Hague. "And he's more blunt than I am."

Shepard was traveling and unavailable for comment yesterday.

Colleagues say the insurance executive had a modest upbringing in Iowa, married his high-school sweetheart, "Rosy," and has two grown children. He is described as unpretentious and capable of holding a conversation with anybody he meets.

"He's not one of those people out there selling himself," said Calman Zamoiski, chairman of Industrial Distributors Inc. and the Baltimore Symphony Orchestra, which includes Shepard as a board member. "He gets along with top [politicians] in Washington; he gets along with hunting guides or fishing guides - he gets along with people from every background."

Shepard began his career in Iowa with Life Insurance Investors Inc. in 1970, serving in various management positions before becoming executive vice president and chief operating officer in 1985. He continued in that position until 1989, when Aegon consolidated its U.S. operations with Life Investors to form Aegon USA with headquarters in Baltimore. Shepard was subsequently named head of the organization.

Over the years, Shepard has orchestrated a series of billion-dollar mergers that have contributed to Aegon's rise as the nation's fourth-largest life insurer. In 1997, the company bought Louisville, Ky.-based Providian Corp. for $3.5 billion. The transaction could have resulted in 360 jobs moving from Baltimore to Louisville, but Shepard was credited by state officials with working to keep the jobs here.

Shepard landed his biggest deal in 1999, when Aegon bought San Francisco-based Transamerica Corp. for $10.8 billion - then the second-largest insurance deal in U.S. history. The merger resulted in Aegon USA moving its headquarters to San Francisco, but the company continues to employ about 900 in Baltimore.

The Transamerica deal was followed this year by Aegon's $1.3 billion purchase of J.C. Penney's Direct Marketing Services Inc. Shepard continues to run the operations from Baltimore, but is known to take a hands-off approach to managing the growing insurance conglomerate.

"He has that managerial style that I like, which is that he makes it perfectly clear to his lieutenants what they're supposed to do and then he lets them do it," Baldwin said.

Locally and nationally, Shepard is known as a player, serving on numerous boards, staying active in politics and raising money for various civic and political organizations. In addition to being on the boards of Mercantile and the BSO, he serves on the board of directors of the Walters Art Museum and is a trustee of the Johns Hopkins Health System Corp., Johns Hopkins Hospital and the Johns Hopkins University.

When Baltimore Police Commissioner Edward T. Norris approached local business leaders for money to buy new equipment, Shepard and Baldwin stepped up to co-chair a foundation to solicit some $1.2 million for the effort.

He remains active in state and national politics, raising funds for candidates and helping the U.S. Chamber of Commerce become a focused political lobbying machine from his position on the business advocacy group's board of directors.

"He has a national reputation," Zamoiski said. "He's made it his business to get to know people."

"He's very measured and he doesn't frighten easily," said Tom Donohue, president and chief executive of the U.S. Chamber. "And when it's time for everybody to get in the boat and row, he's a bigtime rower."

Politically, Shepard is a pragmatist. He supported Republican Ellen R. Sauerbrey for governor of Maryland in 1998, but Aegon also was host to Lt. Gov. Kathleen Kennedy Townsend at a dinner during the 2000 Democratic National Convention in Los Angeles.

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