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Final Take

Top Energy Employer


By Bill Greehey

Obviously, we don’t know why Valero was the only energy company on Fortune magazine’s list of the 100 Best Companies to Work For but we do know why Valero was listed and what distinguishes us from other companies.

All companies say their employees are their number one asset but at Valero we say it with our actions. We have the best pay and benefits in the industry. This year was a record year for Valero so all our employees were rewarded with a 200 percent bonus - one month’s pay. Valero also gives stock options to more employees than most companies. At Valero, all exempt employees are eligible to receive stock options. And in an age of mergers and acquisitions where most companies merge to look for ways to reduce people as a way of reducing costs, we pride ourselves in the fact that Valero has never had a layoff. In fact, we successfully merged two Fortune 500 companies in the same town (Valero & UDS in 2001) without a single layoff.

We’ve weathered bad times through the years but we have always counted on our employees to see us through

  • and they have. In 1998, I think we were the ONLY

energy company that did not have layoffs. Instead, we asked our employees to cut costs in everything but safety and environmental efforts and they came up with $46 million in expense savings that year. A layoff would not have saved as much and would have destroyed morale. Instead, our employees pulled together and were more motivated than ever. Then, when margins improved, we were in a position to take off running. And we did so by acquiring Ultramar Diamond Shamrock Corp. in 2001 — a company that was actually larger than Valero at the time.

Another thing that distinguishes Valero from other companies is its unique caring and sharing spirit. When we founded the company, we said in our mission statement that we wanted to be a company known for giving back to the communities in which we had business operations. We also said we wanted to hire caring people because people who care about the community typically care more about the company and their co-workers. This strategy has worked well for Valero because our employees take a great deal of pride in all that the company does for the community, which results in great employee morale and camaraderie.

Valero used to be in a regulated business. At one time we owned the largest intrastate pipeline in Texas. But we have always had the same philosophy about treating our employees as our number one asset.

Photo curtesy of: Valero Energy

At Valero, we firmly believe that our dedication to our employees is the root of all our success. We believe that if you take care of the employees, they’ll take care of the community and the share holders. And, I’m happy to say that our numbers back up this belief. We’ve had record earnings, a record stock price, record total shareholder return and much more. In fact, Valero’s total shareholder return has been 380 percent over the last five years compared to the S&P 500 Index’s 11 percent loss over that same period. Last year Valero’s total shareholder return was 98 percent and year-to-date it is about 60 percent. Valero just completed the best year in its history and has attracted national attention after receiving a string of honors.

We were ranked No. 1 by Forbes Magazine on their annual listing of America’s 400 Best Big Companies for our 2004 earnings growth and shareholder return; We were ranked 3rd among the large employers on Fortune Magazine’s listing of the “100 Best Companies to Work For.” As you know, Valero also rose to No. 23 on this year’s list of the nation’s best employers — up from its No. 32 ranking in 2004.

It is a tremendous testament to Valero’s unique culture to be recognized for our commitment to the community and to our employees and to our shareholders — all in the same year.

We believe Valero is living proof that a company can successfully look out for ALL of its stakeholders.

Bill Greehey is chairman and chief executive officer of Valero Energy Co., which is based in San Antonio, Texas, has annual revenues of $55 billion and employs 20,000.



March/April 2005

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