Skip to main content

Leslie Shaw can rhyme off plenty of reasons why he lives on the eighth fairway of a golf course in Barbados.

The taxes are gentle and the golf is good -- at least, it was until the 74-year-old entrepreneur was slowed recently by a new hip.

But most of all, it keeps him out of the hair of the professional managers he hires to run his big Toronto-based energy services company, ShawCor Ltd. "If you don't take your hands off the bus, you're going to lose the other bus drivers," says the ShawCor chairman, whose family controls about 64 per cent of the voting interest in this successful and often overlooked public company.

Mr. Shaw, who moved to Barbados in 1994, is half of one of the most spectacularly successful brother acts in Canadian business. His 67-year-old kid brother is JR Shaw, who controls Shaw Communications Corp., a Calgary-based powerhouse in the cable television industry, and Corus Entertainment Corp., a major media company based in Toronto.

The two men control public companies with a combined market capitalization of about $8.5-billion, including almost $1-billion for ShawCor alone. Their total net worth amounts to more than $1-billion, putting them in the top ranks of entrepreneurial brothers. Harrison and Wallace McCain are worth more, but the Shaws get along a lot better.

Both brothers were born in rural southwestern Ontario, but while Leslie has operated from Toronto and, now, Barbados, JR has lived in Alberta since the early 1960s.

"Two aggressive brothers living 3,000 miles apart operate pretty well," says Leslie, who took over the pipeline services business founded by his father, Francis. Meanwhile, JR went west and struck a bonanza in cable television, another of the father's many business ventures.

"We've leaned on each other throughout our existence, and it's been a great relationship," Leslie says. The two brothers own large holdings in each other's major business. Some years ago, each converted his voting shares in the other's company to non-voting shares, lessening potential for family tension.

Leslie insists that he is, by nature, more conservative than JR, and that's reflected in ShawCor's modest debt levels, less ambitious acquisition moves and lower profile.

ShawCor reports almost $700-million in annual revenue from its varied energy-related businesses, which include pipe coating and welding; pipeline instrumentation; and tubing and moulded products for drilling and pipelines. Still, it is less than half that of Shaw Communications, which grossed about $1.6-billion in the fiscal year ended Aug. 31, 2001.

Leslie notes that ShawCor operates in an intensely cyclical business, which has taught it to rein in during tough times, and grow more organically than through acquisitions. ShawCor is sitting on only about $83-million in debt. In a cyclical industry, he says, "if you don't do that, the people lending you the money are telling you what to do."

The company is going through a challenging time because of the slowdown in North American drilling activity, ShawCor president Geoffrey Hyland told the annual meeting recently in Toronto. The bottom line has also been hit by cost overruns and delays in bringing on a new facility in Mobile, Ala., that focuses on welding and coating pipe for deepwater drilling. Mr. Shaw says the Mobile glitches "kind of snuck up on us." His managers underestimated costs -- the project is on a delta -- and construction was delayed by heavy rains. "It got away from us," he admits, adding ShawCor had management problems, which have been dealt with.

ShawCor's stock has recently traded below $16, off from more than $21 almost a year ago. The drop concerns Mr. Shaw, but he insists he doesn't monitor daily movements of the family's total investment. "It's been up and down and all over the place. We never look at what our total wealth is. We ignore that and just work on the stock."

Canadian Business magazine recently estimated his net worth at $446-million but he says that doesn't factor in debt.

ShawCor is an international company with 43 plants in 20 nations. Mr. Shaw oversees the Barbados office, financing arm for worldwide operations. Another hub is Houston, where more and more activities are concentrated. Mr. Shaw complains a complex, excessive tax burden has contributed to hollowing out Canada's corporate headquarters, but he says he isn't going to shift the head office out of the country. "I guess if we were going to move, it would be to the [United]States but that doesn't give you too much advantage."

Both Shaw brothers are going through a transition. JR, who has handed executive duties to his children, has quit Leslie's board; Leslie will soon do the same at Shaw Communications.

Over the next two years, Leslie also plans to pull back from ShawCor and give up the chairman's job.

He has already ceded considerable authority to his daughter Virginia, who at 50 is vice-chairwoman and looks after the family's financial affairs. His son Allan also works in ShawCor.

Mr. Shaw acknowledges that the Shaw families greatly benefit from the ability to issue two classes of shares: Ownership of multiple voting shares allows the family to maintain control, while other public shareholders trade in subordinate voting shares.

"The only reason we still have a bunch of companies in Canada is the dual share issue. Otherwise, we'd be all owned by the States."

Report an error

Editorial code of conduct

Tickers mentioned in this story