New CEO at Aegon may keep HQ here

Big Dutch insurer names Shepard's replacement

November 09, 2007|By Tricia Bishop | Tricia Bishop,Sun reporter

Donald J. Shepard is the reason a major European insurer kept its North American headquarters in Baltimore.

He lives in Baltimore, but he's the CEO of the Netherlands-based Aegon NV.

So the announcement yesterday that Shepard plans to retire next year and pass the torch to current chief operating officer - and Dutch national - Alexander R. Wynaendts raised this question: Was Maryland about to lose an important international presence and the 1,000 or so jobs the company has here?

The not-so-simple answer: Probably not.

Wynaendts said he saw no reason for Aegon, which operates under the names Monumental and Transamerica in the U.S., to leave the city. And Shepard agreed, though he pointed out that the headquarters might be moved if expenses rise.

"Baltimore's a great city," Shepard said yesterday from the Netherlands, where he and his staff were celebrating the day's news, which included reporting third-quarter earnings that rose 47 percent from the quarter a year ago.

"[But] I hope that you don't have significant increases in taxes and all that, because it gets harder to recruit. ... Personal tax levels are always [a consideration]."

Shepard's statement - more thought than threat - comes as state lawmakers consider various tax plans to balance Maryland's budget and the Department of Business and Economic Development ramps up its efforts to attract international investments.

Economists say foreign companies bring jobs, skilled workers and fat paychecks.

"Governors are very actively involved in competing with one another to get these jobs," said Peter Morici, a professor of international business at the University of Maryland's Robert H. Smith School of Business. "They're great employers."

Maryland has set up several partnerships with other countries hoping to draw their companies here, and the Department of Business and Economic Development regularly sends teams abroad to talk up Maryland.

Shepard, who plans to remain in the state when he retires and perhaps devote more time to his fly fishing (he lives in Phoenix), points to the Chesapeake Bay, the Baltimore Symphony and the presence of Johns Hopkins as some of Maryland's selling points.

But he readily adds this: "I made Baltimore the corporate headquarters because that's where I was living."

Shepard began his career with Aegon in Iowa, where he grew up, moving to Baltimore in 1989 to head up Aegon USA after the company acquired locally based Monumental Corp. The city was named Aegon's North American headquarters in 1991.

Shepard is a trustee at the College of Notre Dame, Johns Hopkins Hospital and the Walters Art Gallery. He's also a board member on the Greater Baltimore Committee as well as the United Way of Central Maryland.

He was named chief executive of Aegon's entire operation in 2002, becoming the first American to head the 24-year-old company and reportedly the first U.S. citizen to run a major Dutch business.

Under his watch, the company, which deals chiefly in life insurance and pensions, expanded into emerging markets in China, India and central and eastern Europe.

Yesterday, it reported $792.4 million in net income for Aegon's third quarter.

Aegon "is in a solid position for future growth" because of Shepard, said Dudley G. Eustace, chairman of the company's supervisory board, in a statement.

But Shepard turns 62 next year, which is the company's mandatory retirement age.

Wynaendts, 47, who will succeed Shepard in April, lived in the Baltimore area with his family for about a year during 2005 and 2006, though home is the Netherlands. He said yesterday that he had no plans to relocate the company's North American headquarters.

"I have absolutely no reason to change it," Wynaendts said. "I even have a special connection with Baltimore."

Roughly two-thirds of Aegon's earnings come from its U.S. operations, which are spread throughout the country, and a quarter of that comes from Baltimore's divisions, which employ about 1,000 people.

Worldwide, Aegon employs about 30,000 people, half of them in the United States.

tricia.bishop@baltsun.com

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