When Jerry Moyes, the feisty entrepreneur who built Swift Transportation from one truck into a $4-billion business, retires at the end of this year, his exit from the trucking business will be lamented by some in the industry and celebrated by others.
The 72-year-old Moyes, who declined to be interviewed, co-founded Swift in 1966 after forming a partnership with Common Market Distributing Corp., a steel importer. Twenty years later, Moyes took sole control of the Phoenix-based company as chairman, chief executive and president, titles he’s held since.
Under his watch, the company has grown to more than 18,000 trucks and to more than $4 billion in revenue last year.
Throughout his business career, Moyes has stood out as a controversial figure. Investors and others have questioned Moyes’ practice of using his Swift shares as collateral for loans for other businesses. He’s an outspoken supporter of Republican presidential nominee Donald Trump. He was the managing partner of the Phoenix Coyotes hockey team when it filed for bankruptcy in 2009 and was sold to the National Hockey League.
Moyes, critics say, has taken advantage of the company’s so-called dual class stock system that allows him to have more voting power than individual stakeholders because he’s the founder of the company. Dual-class systems are more suitable for small start-up companies than 50-year old trucking firms, detractors say, and efforts by shareholders to get Swift to change its structure have failed.
Swift shares rose almost 9 percent on the day last month when the company announced his retirement.
His exit gives the company a chance to “clean the slate,” Ravi Shanker, a freight industry analyst at Morgan Stanley Research, said in a report to clients. Shanker said the CEO’s exit gives investors a chance to focus solely on fundamentals instead of the corporate governance issues that dogged Moyes’ leadership.
Still, many in the trucking industry credit Moyes for his relentless work ethic that has powered Swift’s tremendous growth. Moyes is known for rising early – sometimes at 2 a.m. – to begin work, then staying out until 10 p.m. for dinner meetings or to convene with clients.
Tony Bradley, president of the Arizona Truckers Association, called Moyes “larger than life” and a “transformational figure” in the trucking industry.
“Jerry is one of a kind,” Bradley said. “I can’t tell you how many people I’ve run into who’ve said he helped them start their businesses. He really has a huge heart, but he’s also a great businessman. It’s going to be hard for anybody to live up to Jerry.”
Still, Moyes never was quite what analysts from the large Wall Street investment houses expected in a CEO, said John Larkin, an analyst at Stifel Transportation & Logistics Research Group. He had a “working-man persona” not unusual for chief executives who come from blue-collar backgrounds, especially those in the trucking industry, Larkin said.
“A lot of folks misunderstand Jerry,” Larkin said. “These guys who started out with one or two or four trucks, they’re kind of a unique breed.”
Although such executives – the group includes Clarence Werner, founder of Werner Enterprises and Crete Carrier Corp. founder Duane Acklie – might not have MBAs, Larkin said they know about freight and cost control and how to hammer out a contract with a shipper. Moyes has a bachelor’s in business from Weber State College in Ogden, Utah.
“A lot of slick folks in New York never really dealt with people like that,” he said.
Corporate governance issues have plagued Moyes’ tenure at Swift.
Moyes’ most-contentious act has been his use of shares that he owns as collateral when borrowing. The Wall Street Journal reported that as of May, 75 percent of his shares — valued at about $700 million — were used as collateral against loans, a practice that’s been going on for many years.
The practice of borrowing against his shares aroused the ire of the International Brotherhood of Teamsters. Michael Pryce-Jones, senior governance analyst for the organization, told Trucks.com that the outgoing CEO is “the poster child for what’s wrong” with corporate governance.
Swift has acknowledged the issue in several Securities and Exchange Commission filings, writing, “conflicts of interest or potential litigation that may arise from other businesses owned by Jerry Moyes, including pledges of Swift stock and guarantees by Jerry Moyes related to other businesses; the significant amount of our stock and related control over the company by Jerry Moyes; and related-party transactions between the company and Jerry Moyes” may impact the company financially.
In a regulatory filing, Swift said that while Moyes’ retirement isn’t effective until the end of the year, duties normally associated with those of the chief executive would be immediately transferred to his successor, Richard Stocking.
That’s telling, Pryce-Jones said, as it may be an indicator that Swift’s board of directors understands that Moyes’ presence may do more harm than good.
Despite his setbacks over the years, Moyes is well-regarded within the trucking industry, something even Teamsters’ Pryce-Jones concedes. The fact that he turned a one-truck company into the behemoth it is today is a testament to his hard work and knowledge of the industry, Larkin said.
He’s widely known as a no-nonsense, hardworking CEO who tirelessly advocates for the company and is generous with his time and money. Stocking, who’s worked at Swift in several capacities since 1992, called Moyes his mentor and said he wouldn’t be where he is today if it weren’t for Moyes.
“Jerry is a legend,” Stocking said. “He’s an icon, and he’s blessed my life in so many ways, for which I’ll be eternally grateful. He’s only going to be a phone call away for me, which is great so he can continue to help me and mentor me. His legacy will be felt for a very long time in this industry.”