Hawaii Business CEO of the Year 2013: Stanley Kuriyama of Alexander & Baldwin
Stanley Kuriyama did something all too rare for a CEO: He put his company’s success ahead of his personal interests.
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Kuriyama’s close associates call him selfless and unassuming. Indeed, according to an informed source, in at least three of the last seven years he has given back to the company pay raises worth hundreds of thousands of dollars. But Kuriyama won’t tell you about that himself.
“That’s just his style,” says the source, who asks not to be identified. “It’s a mark of his character.”
The most recent A&B proxy statement reports Kuriyama’s total annual salary for 2012 at $581,601, with another list of options he can exercise. That brings his total calculated compensation to $2.3 million. (That includes stock awards for 2012 pegged at $629,966; his option awards pegged at $270,004; his nonequity incentive plan compensation at $248,000; and his nonqualified deferred compensation earnings at $563,889.) The documents reveal Kuriyama’s give-back to the company, showing that his salary dropped from its 2010 level of $615,000 with stock options that gave him a total of $3.67 million.
A&B spokeswoman Suzy Hollinger notes that it was Kuriyama who requested that reduction “considering the (smaller) size of the company following separation from Matson.”
While Kuriyama acknowledges that his wife is a Family Court judge – Christine Kuriyama – and his son is in graduate school at the University of Hawaii, he deflects most questions about his personal life. And, though he is firmly in the driver’s seat at A&B, Kuriyama prefers to give his leadership team most of the credit for successes. That’s a key part of Kuriyama’s management style, says Yeaman.
“As he will tell you, his team played a significant role in all of these transactions,” Yeaman says. “(But) as the CEO, you’re the visionary and the one leading the team.”
A&B’s decision to pivot back to Hawaii came after the decision to spin off Matson. “In looking at the separation, we had to think about what each company was going to look like,” explains Kuriyama.
“On the real estate side, we knew that as a much smaller company, engaged in a cyclical business on the investment side, we had to answer two questions as we thought about who we would be and look like as a stand-alone company: One, What are our competitive strengths and advantages? And, two, Why would an investor buy stock in a real estate company in the middle of the Pacific Ocean?
“In both cases the answer led back to Hawaii. Our strengths and advantages are clearly Hawaii-based. It’s our home. It’s where we have our relationships, a deep understanding of the market and the economy, and the brand we’ve built up over many years. So that question was an easy one to answer: Hawaii is where our strengths lie.
“But in asking the second question – Why would an investor buy stock in a company in the middle of the Pacific? – the answer is usually because it’s something about Hawaii they like. They see something in Hawaii’s future that makes them interested in investing in Hawaii, whether it’s a turnaround of the economy, the intrinsic value of Hawaii or something else. That’s why all roads led back to Hawaii. So one of the key things is to position our company as a great vehicle for people who want to invest in Hawaii.”
Some might think the decision to separate Matson from A&B would go against Kuriyama’s personal goals – after all, he would be left as CEO of a much smaller company – but he says that wasn’t a factor.
“There are a number of important qualities that go into the making of a good CEO, and those qualities differ depending on the company’s business needs and objectives at the time,” Kuriyama explains. “But if I had to choose just a single quality, I think it would be the ability to place the company’s interests above your own.
“A CEO has to do what’s best for the company and its various constituencies, and this sometimes may not be consistent with what’s in the best personal interests of the CEO. A good example of that would be our decision in 2012 to separate A&B’s shipping business from its real estate business. That was the best decision for the company, but it personally meant that I was now going to be the CEO of a much smaller company.”
Dods says Kuriyama’s decision took a lot of character. “Very few CEOs would give up the position and the power – cutting his position in half to create another giant for Hawaii. That takes a special kind of person,” he says.
Kuriyama says the separation established clearer identities for both companies, and thus a better chance of attracting investors.
“Separation enabled investors and Wall Street to have a better understanding of each business. Very few investors or analysts are comfortable following both a transportation company and a real estate company.”
Dods, who continued as a director of both companies after the split, says the separation has paid off.
“When the deal was split, A&B’s (combined) market cap was roughly between $1.6 and $1.7 billion,” Dods says. “One year later, as a result of the split, if you were to combine the two market caps, it would be over $3 billion. The investment community loved the transparency (and) he has enriched his shareholders by over $1 billion.”
Right after the company was split on June 29, 2012, the price of A&B’s stock was $25.17 a share. On Nov. 19, 2013, when this story was being finalized, the price per share was $37.31 – a 48.2 percent increase during a period in which the S&P 500 rose 38.6 percent.
Investment analyst Borden says investors are impressed with the decisions made by A&B’s management team and by Kuriyama at the top.
Dods, who has known Kuriyama for more than two decades, calls him “a model for the community.”
“From the University of Hawaii to Harvard Law School is not a bad way to go. He’s an exceptional CEO, but he never takes credit. He’s just very low key,” Dods says.
Even before he joined A&B, Kuriyama caught the attention of Meredith Ching, who was then VP for government relations at A&B. She remembers working with him as an outside attorney as he came to the A&B board with real estate proposals. “I remember him having a great sense of humor,” she says.
Now, as part of Kuriyama’s leadership team, Ching says she sees the depth of his integrity and the high quality of his character.
“He just has this ability to get the best performance out of everybody on his team,” Ching says. “He has the knowledge of what we all do and everyone’s roles because he’s not afraid to do it himself. Nothing is too big or too small. He doesn’t see strata. It’s just everybody working to get a common result.
“For me, it’s a person’s core values that lead to respect for them,” she says. “With Stan, it’s his personal qualities that you admire and respect. He’s hard working and takes complete responsibility if something goes wrong. And he shares attribution when something goes right.”
Even one of the leaders of ILWU Local 142, which is in a constant back-and-forth tug of war as it represents A&B workers, has many positive things to say about the man at the top. Guy Fujimura, secretary-treasurer for Local 142’s Hawaii Division, calls Kuriyama’s leadership style “very effective, less formal and more collaborative.
“He respects the people he leads and, I believe, inspires trust,” Fujimura says in an email.
He calls Kuriyama “the best kind of business leader for Hawaii. While very aware of his corporate responsibilities, having been born and raised in Hawaii and well steeped in Island tradition and values, he has an awareness that with great power comes great responsibility. He has continued A&B’s tradition of giving back to the community, not only a share of the company’s profits, but also their participation.
“And while there are those who disagree, I also believe (that) in making their corporate decisions, there is great awareness and concern of the effect of those decisions on their employees, the employee families and the communities in which they do business.”
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