Pacific Enterprises CEO to Step Down : Paul A. Miller’s Resignation Ends 103 Years of Family Leadership

Paul A. Miller, who shepherded Pacific Enterprises through an aggressive diversification beyond its core Southern California Gas Co. utility, said Tuesday that he will retire as chairman and chief executive at the end of this month, ending a 41-year career and 103 years of family leadership.

Miller, 64, whose grandfather co-founded the $7-billion company, will hand the reins Nov. 1 to President James R. Ukropina, 52, a former oil executive who joined the company five years ago and played a key role in Pacific Enterprises’ move into specialty retailing and oil and gas production.

Ukropina, who will be the first non-family member to run the company, will be succeeded in the presidency by Willis B. Wood Jr., 55, now an executive vice president. The changes were approved by the company’s directors at a meeting in their Los Angeles headquarters Tuesday.

“I think I’m leaving behind some real challenges to the succeeding management,” Miller said later. “We’ve gone through a time of rapid acquisitions, which was by design, and we knew when we did it that it was giving us a bit of indigestion, but it’s important to move ahead.”

Ukropina said, “My challenge will be to continue to hold the course we’re on.”

The succession comes at a time when the company is poised to reap some of the benefits of its recent acquisitions and expansions, particularly with recovering oil and natural gas prices and increasing demand for gas, analysts said.

Entered New Fields

“I think the team that Mr. Ukropina was a part of and that he helped form over the last couple of years is pretty well in place and pretty well prepared to take advantage of what may turn out to be a fairly bright environment for the utility, as well as for the other two businesses,” said Joseph Culp, an analyst with First Manhattan Co. in New York.

The company’s main business remains Southern California Gas Co., the nation’s largest gas utility with 4.4 million customers, which accounts for more than half of the corporation’s net income.

But during Miller’s administration, the company moved aggressively into non-utility businesses, focusing on specialty retailing and oil and gas production, with the goal of earning half of its net income from such operations.

But Miller drew some criticism for the company’s rapid expansion and that led to a bitter proxy fight in the spring. Moreover, the timing of some of the deals may have hurt the company’s standing on Wall Street.

The company’s stock plunged from a high of $60 a share in 1987 to a low of $35.625 this year. But rising oil and gas prices have helped the stock recover somewhat. On Tuesday, it closed at $51.125, up 87.5 cents a share on the New York Stock Exchange.

At the end of the second quarter, Pacific reported net income of $53 million, compared to $48 million a year ago. Operating revenue for the quarter was $1.5 billion, compared to $1.3 billion a year ago.

The three units have had mixed results. The gas company reported improved operating income after taxes of $52 million in the second quarter, compared to $48 million a year earlier.

Retailing Unit Slips

The oil and gas unit reported strong operating income after taxes of $20 million for the quarter, compared to $10 million a year ago. But the retailing unit saw operating income after taxes fall to $11 million in the quarter, compared to $12 million a year ago.

In August, 1986, Pacific Enterprises bought Thrifty Corp. for $886 million. And in May, 1988, the company bought Pay ‘n’ Save drugstores and Bi-Mart discount stores, which both operate mainly in the Pacific Northwest, for $232 million in stock.

In March, 1988, Pacific bought Sabine Corp., a Dallas-based oil and gas company, for $339 million and subsequently acquired mineral rights on the Burnett Ranch in Texas.

The company changed its name from Pacific Lighting Corp. in early 1988 to reflect its diversification.

Miller, who turns 65 on Oct. 30, joined the company in 1948 after graduating from Harvard College and has held several executive positions in the company. He was named chief executive in 1968 and chairman in 1972. He will continue as a member of the board and will chair its executive committee.

Ukropina, formerly with Santa Fe International, joined Pacific as executive vice president and general counsel in November, 1984, and was named president in June, 1986. He will remain a member of the board.

Wood, who has been with the company for more than 30 years, was also elected to the board Tuesday, raising its membership to 15.