Wade B. Thompson’s hands-off management style and his impressive RV manufacturing portfolio were spotlighted in a lengthy feature article in the current issue of Forbes Magazine.
The profile, titled “Lord of the Rigs” and written by Jonathan Fahey, detailed Thompson’s Wellington, New Zealand roots and current successes as president, CEO and chairman of the board of Thor Industries Inc. The article also addressed the corporation’s future challenges in the motorized RV sector.
The piece recounted Thompson’s acquisition of 10 RV companies over the past two decades, which has positioned Thor with a 23% market share.
Since purchasing Airstream Inc. in 1980 with partner Peter Orthwein, and successfully turning the company around, Thompson has continued to aggressively purchase RV builders. According to Forbes, Thor’s strategy is to pay five to six times pretax income for companies with sales between $30 million and $400 million.
Forbes outlined the “autonomous” structure of the Thor family, which Fahey paralleled to General Motor’s early business strategy that lets divisions actively compete against each other.
According to Forbes, giving divisional heads free rein, and considerable performance incentives, allows Thompson to focus on the big picture from a midtown Manhattan headquarters inhabited by only him and an assistant.
Forbes said Thompson’s management style is particularly evident in Thor’s $151 million purchase of Keystone RV Co. in 2001, described as “Thompson’s biggest acquisition.”
Since its inception, Keystone, which has become the industry’s most dominant player in towables, has dedicated separate plants and managers to each of the company’s 14 brands.
As with all of Thor’s divisions, compensation at Keystone is based strictly on production, from upper management to the line workers. Group leaders can make $75,000 a year and line workers as much as $50,000.
“I want every one of our company heads to feel like it is their business,” Thompson said. “If they don’t perform, they don’t get paid very much. If they do, there is no cap to what they can make.”
In fact, Forbes said six managers at Thor earned more than Thompson’s $1.1 million salary last year, according to SEC records. “I am absolutely delighted if someone earns $5 million in a year at this company,” Thompson said, “because it is based on the results of the operation they are running.”
Stockholders have also benefited. The article said that shareholders have seen a 450% price jump since 1998, compared with an average 170% rise in other public RV companies. Thompson currently has a 31% stake in Thor that is worth an estimated $515 million.
According to Forbes, Thor is debt free, allowing Thompson to move quickly when an acquisition opportunity arises without overleveraging. That, however, doesn’t mean that he always moves quickly. The recent $43 million purchase of Damon Corp., had been in the works for eight years.
“Damon probably could have gotten a better price,” said Orthwein, Thor’s vice chairman, who has an $80 million stake in the Jackson Center, Ohio-based corporation, according to Forbes. “We’re giving them purchasing power and the resources to fix up plants.”
Forbes also noted that Thor has not yet pulled out of its acquisition mode.
“There are 75 companies out there, and the top six have 70% of the industry,” Thompson said. “That leaves 30% of the industry still out there. We’ve got a couple of prospects on my desk right now.”