A lifetime of wisdom to share
William Galligan, former vice president of investor relations at Kansas City Southern, won the lifetime achievement award at this year’s IR Magazine Awards – US. Here, he reflects on his career.
How did you get into IR?
I started working for a little electric utility company called United Illuminating, where I was in charge of corporate communications. I was the speech writer for George Edwards, the CEO, and I prepared him for interviews and public statements. In 1991 he became the president of Kansas City Southern and about a year after that I followed him out there.
The company didn’t really have a presence on Wall Street in terms of an IR function. It almost treated itself as a private firm. I started out by legitimizing and formalizing the corporate communications function and then did the same with investor relations. From 1994 onwards, IR was really my show.
What are some of your career highlights?
When I joined Kansas City Southern, it was a very complex company made up of two separate businesses: the railroad business and a financial services business, where we owned Janus Capital, Berger’s mutual funds and DST Systems. It meant that between 1994 and 2000 we had two very different classes of analysts – transportation and financial services – and neither of them really understood the business.
One of the highlights for me was learning about both businesses and being able to communicate about them in a way that made sense. We then went on a tremendous run, where our stock rose from $15-$20 per share all the way up to $100. Of course, I can’t take all of the credit, but at least the story was straight.
The second highlight was when in 1996 Kansas City Southern, along with a partner, won a bid for the crown jewel of the Mexican railroad. People sensed that there was a big opportunity, but it was also very complex. You had a public that didn’t trust Mexico and that was sometimes distrustful of the politics involved. I managed to explain the story and ease concerns, and I’m really proud of that whole process.
The third highlight was when we spun off our financial services business to become a stand-alone railroad company in 2001. Our stock had been selling in the high $80s and, after the spin-off, the railroad stock was at $5.50. The chief executive at the time traveled the country and tried to get the stock up to $10 but there was a lot of skepticism. Sometimes during that period, I had to sell the sizzle more than the steak: by 2007, we had only two analysts covering us.
But we hired someone – who was excellent – to support me, and over the next five years we went from two analysts to 25, which was pretty exciting.
What is your advice for the next generation of IR professionals?
Firstly, an early mentor for me said it’s really hard to hate a company from the outside if you like the people who work for that company. No matter how harsh the criticisms of the company from the buy side and sell side, I insisted that those criticizing saw us as friends.
Secondly, you obviously have to believe in your company and support your company, but don’t just drink the Kool-Aid: if you’re going to be a friend of the buy side and sell side, you have to tread a line of being supportive of your company alongside giving enough information to the investment community
You retired earlier this year. How will you spend your time now?
I’m only sort-of retired. Last year our CEO, Patrick Ottensmeyer, asked me to chronicle the history of Kansas City Southern so I’m writing a book about the people who created and built the railroad and have had an impact on the company. It’s fascinating. It’s almost as if a personality is formed by the people who founded the company and it has been continued by future management. Many times, the reaction to crises are the same from the 19th century all the way to 2018.
This article originally appeared in the Summer 2018 issue of IR Magazine.