A legend at 40 at Alex. Brown

THE BALTIMORE SUN

Mayo A. Shattuck III had just landed a job in Alex. Brown Inc.'s San Francisco office in November 1985, on the rebound from an uncertain future with a company whose prospects seemed murky. But it took less than a year -- and a little luck -- for him to land the deal that launched his career.

His friend and former Stanford University classmate, Scott McNealy, chairman of Sun Microsystems Inc., had just taken his computer manufacturing company public, but he needed more funds with which to expand.

Mr. Shattuck persuaded Mr. McNealy to drop his investment banker and let Alex. Brown manage the $100 million deal.

Today, Sun Microsystems is a multibillion-dollar giant that dominates the industry's workstation business, and Mr. Shattuck, 40, is Alex. Brown's president and chief operating officer.

"That was really impressive," said William L. Paternotte, Alex. Brown's managing director of marketing and client services, who has been with the firm more than 20 years. "That was kind of a showcase transaction when it happened. Bringing in a client of that stature is a defining moment."

Indeed, muscling out a competitor in such a high profile transaction was a coup for Mr. Shattuck, whose easygoing disposition masks an intense desire to win the big deals. In his 10 years with the company, he has done so many initial public offerings that a bookshelf in his office overflows with "Lucites," clear, cube-like trophies coveted by investment bankers who take companies public.

"I have hundreds," Mr. Shattuck said. "I don't take them anymore. I only keep the ones I was intimately involved in."

And the deals haven't stopped coming for Alex. Brown. The Baltimore-based company managed 215 initial public offerings greater than $10 million from 1989 to 1994, second in the country behind Smith Barney Inc.'s 223 deals, according to Securities Data Co. The firm has been the lead manager in the initial public offerings of such notables as Microsoft Corp., Starbucks Coffee Co., Outback Steakhouse Inc. and software maker Oracle Systems Corp.

For the first eight months of the year, the company has led or co-managed 33 deals raising a total of $2.3 billion, and has done 47 "follow-on" offerings -- offerings where companies go back into the market to raise additional funds -- that have raised $5.1 billion.

"It has been a huge year," said Mr. Shattuck, who expects the company to be involved in a total of 140 IPO and follow-on offerings this year.

While the initial public offering business represents just about 8percent of the company's revenues, it is crucially important to the firm because it sows the seeds for future and more lucrative opportunities with the companies it takes public.

If Alex. Brown beats out competitors like Morgan Stanley Co., Montgomery Securities or Robertson Stephens & Co. on a deal, it has a good shot at handling future offerings, mergers and acquisitions, and the personal portfolios of the executives.

Although it is smaller than many of the firms it competes against, Alex. Brown is well known in the industry for its expertise in taking computer, telecommunications and health-care firms public.

Part of that success can be attributed to Mr. Shattuck who, along with a team of others, is largely credited with building the company's high-tech business.

When Mr. Shattuck joined the firm's San Francisco office as an investment banker in November 1985, he was well prepared for drumming up business, especially from companies in Silicon Valley. While working toward a master's in business administration at Stanford University, he met and befriended a number of young, aggressive entrepreneurs like Sun Microsystem's Mr. McNealy, who saw vast opportunities in computers.

After graduating in 1980, Mr. Shattuck took a job as a strategy consultant with a firm in the San Francisco area called Bain & Co., and continued to build his network of contacts. With Bain, he became chief operating officer of an ailing company that developed a method of extracting air and water from oxygen. The process had a number of applications, including reducing moisture in bottle caps to keep beer fresh longer. The company also had subsidiaries that made wet suits and diving suits, but the units were losing money.

Mr. Shattuck didn't see much benefit in staying because it would have taken anywhere from five to 10 years to bring its applications to the market.

L "I didn't want to risk my career on basic science," he said.

He liked the idea of taking young companies public and plotting their futures. So he left to join Alex. Brown, which was opening a San Francisco office. And he started auspiciously by landing the Sun Microsystems deal. Shortly thereafter, Mr. Shattuck played a key role in bringing in a number of other big high-tech clients that wanted to tap the public, including software makers Oracle Systems Corp. and Novell Inc., and Octel Communications, a designer and manufacturer of information processing systems.

"Those were four deals that live on in infamy," said David M. DiPietro, managing director of Alex. Brown's equity capital market group. "On the West Coast, he was one of the key guys."

For his work, Mr. Shattuck was named managing director of the San Francisco office in 1989, and two years later he was promoted to president and chief operating officer and moved to Baltimore.

Clients and co-workers attribute Mr. Shattuck's success partly to his easy going manner and ability to think strategically. In that way, he is the perfect foil to Alex. Brown's chairman and chief executive, A. B. "Buzzy" Krongard, who also has a good mind for business, but is seen more as the firm's emotional leader.

"Buzzy is hard-charging and will take the Marines up the hill. He appeals to the emotions," said a company insider. "Mayo is cerebral. Mayo will tell you how to take the hill."

Howard Schultz, chairman and chief executive of Starbucks Coffee, the Seattle-based retailer of specialty coffee, says Mr. Shattuck is a "brilliant strategist."

"We've had three consecutive financial transactions in 1992, '93 and '94, and each one of those transactions I can tell you Mayo was not only involved in, but very much a part of coauthoring very important and valued suggestions with regard to the strategic placement and the type of instrument that we were going to execute."

Mr. Schultz also likes Mr. Shattuck because "you don't get any of the Wall Street trappings . . . the arrogance."

That is not to say Mr. Shattuck is a pushover. There is an intensity about him that is hidden by his quick smile and golden boy looks. In high school he played linebacker, and at Williams College he was captain of the tennis team. He also is a 10-handicap golfer who can crush a ball 300 yards.

"He really hates to lose, even in sports," said Mr. DiPietro. "The simplest game can turn into a production. He is constantly challenging himself and his teammates."

His workday starts at 6:45 a.m., and he's been known to put in marathon work weeks, logging up to 100 hours in a seven-day period.

That doesn't leave a lot of time for family life. Mr. Shattuck, who lives in Baltimore, recently was divorced from his wife, Jennifer. He says his 13-year-old son, Mayo, and 11-year-old daughter, Katie, are his top priorities.

"I think they would say they have a pretty good dad," said Mr. Shattuck, who last year received a base salary of $200,000 and a bonus of $1.9 million.

Mr. Shattuck also has high expectations of his department heads and he doesn't shy away from confronting them if mistakes are made. "He is not afraid to call people on the carpet," Mr. Paternotte said.

These days Mr. Shattuck spends much of his time managing Alex. Brown and its 2,400 employees. Instead of looking for companies to take public, he's stroking a customer who's been wounded in a report by one of the firm's analysts, settling an internal problem, or flying around the country marketing the firm to prospective clients.

"There is nothing like being in the field winning business," he said. "I expect to be there. We are hardly a firm that glorifies management."

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