IT'S A good thing the Europeans have discovered stock options. Otherwise Dutch insurer Aegon NV couldn't afford Baltimore's Don Shepard as its next chairman.
Generous pay is presumably one factor that has kept Shepard, a smart, talented fellow who could make big money at any number of American-owned concerns, reporting to The Hague, the Dutch administrative capital.
Aegon was one of the first European firms to figure out that executives work harder and smarter if their pay is linked, U.S.-style, to stock performance. Now the company, one of the world's biggest life insurers, is taking the next logical step and again breaking ground by appointing an American to run the whole caboodle.
Shepard, pilot of Aegon's American operations, will take over as chairman of parent Aegon NV, splitting his time between Baltimore and The Hague and adding another thread to an increasingly substantial trans-Atlantic corporate connection.
It was easy to miss the picture as it was developing, but in recent years Europeans have infiltrated Maryland business in a way that was once unthinkable.
Aegon bought life insurer Monumental Corp. Deutsche Bank AG of Germany owns investment house Alex. Brown; Switzerland's Zurich Financial Services bought insurers Maryland Casualty and Fidelity & Deposit Co. of Maryland; Allied Irish Banks PLC owns Allfirst Financial; and German-French Allianz/AGF owns Euler ACI Holdings.
And that's just in finance.
Giant Food was bought by the Netherlands' Royal Ahold NV, which also purchased wholesaler U.S. Foodservice of Columbia. Europeans own both the Food Lion and Super Fresh chains.
Each year about a dozen European companies, especially bio- and information-tech outfits, set up or expand shop here, says James L. Hughes, director of Maryland's Office of Technology and International Business. Dutch biotech concern Qiagen NV and British telecom firm Bookham Technologies PLC are two recent examples.
When it comes to the United States' global business relationships, Mexico, Canada, China and Japan get most of the attention - good and bad.
But for my money, the real story is the European-American pipeline, where the gush of funds in both directions makes U.S. commerce with even our closest neighbors look ho-hum.
Sure, Canada and Mexico are our biggest import and export partners, but Europe as a whole equals Canada and surpasses Mexico in U.S. trade volume. And in mergers, startups and other direct investment, Europe is far ahead, sinking a record $294 billion into American ventures in 1999 and another $224 billion last year - 10 times as much as Canada and 20 times as much as Japan.
There's no such thing as a North Atlantic Free Trade bloc yet, but you wouldn't know it from these statistics. The European ingredient is especially strong on the mid-Atlantic coast, where Britain and Germany are almost as near to hand as our North American trading buddies. Europe is Maryland's biggest export destination.
For the latest European adventurers, America holds the same allure of freedom, space and enrichment as it did in 1901 or 1601.
The European Union is supposed to foster fluid trade from Athens to Stockholm. But in practice, Europe still labors under centuries-old commercial and political divisions, and the federal government in Brussels adds a new layer of bureaucracy to what was already a regulatory jumble, says Roger Urban, a marketing consultant in Lexington, Mass., who has advised numerous European firms in the United States.
If you think zoning restrictions under Gov. Parris N. Glendening's Smart Growth program are tough, try building a supermarket in France or Britain. Are you outraged about U.S. taxes? Move to Germany, where top income tax rates approach 50 percent.
Thanks to the U.S. Constitution's wonderful commerce clause, which bans states from levying tariffs and otherwise meddling in internal trade, the United States beckons Europeans with a rich, seamless and relatively hassle-free playing field.
"The European companies here operate essentially like U.S. companies," says Willard M. Berry, president of the European-American Business Council.
The same business practices increasingly include hiring the best person for the job, regardless of nationality or salary requirements. While Japanese companies almost always appoint Japanese managers for U.S. plants, Europeans often hire Americans, although tapping a Yank for a big-company chairmanship may be unprecedented.
Asked by analysts last week whether he would bring a new style as Aegon's boss, Shepard pointedly compared himself with his predecessor in terms of business culture, not nationality. "He's a bookkeeper," Shepard said, "and I'm a sales guy."
On Dec. 1 Aegon will mark the melding of Europe and America by sponsoring the Baltimore Symphony playing Brahms and Liszt at The Hague. To wit: A U.S. orchestra will entertain a Dutch audience with works by German and Hungarian composers, with financial support from a Dutch insurance company soon to be headed by an American.