Koch Industries, which has been led since 1967 by Charles Koch, is laying the groundwork for a future less dependent both on the family name and the oil and gas that powered its rise.
The company plans today to name a new crop of executives, including a co-CEO to share power with the 87-year-old scion who, along with his late brother, David, built a network of oil pipelines in Oklahoma into one of the largest private companies in the U.S.and the base of an industrial, philanthropic, and political empire. A formal announcement is expected later today, people familiar with the matter said.
Dave Robertson, 61, who started as an asphalt salesman at Koch in the 1980s and later ran its energy and agricultural businesses, will be co-CEO. Its new president, Jim Hannan, 56, oversaw its investment arm and several of the tech companies Koch has acquired in recent years.
They will help lead a firm that is trying to outgrow its reputation as a shadowy industrial giant, expanding into Silicon Valley and Wall Street. Koch has 120,000 employees and more than $100 billion in annual revenue.
A generation of capitalist kings are about to exit the stage, one way or another, and will turn over giant companies that are, due to their private ownership, shielded from the market forces and public pressures that have guided corporate boardrooms in recent decades.
Who takes over firms like Berkshire Hathaway, Bloomberg, and Bridgewater is a decision left entirely to their founder-kings — Warren Buffett, Michael Bloomberg, and the somehow-never-actually-retired Ray Dalio. (Berkshire is publicly traded but effectively controlled by Buffett via special voting shares.)
Some private giants stay managed by their founding families and thrive; investments giant Fidelity and media conglomerate Cox Enterprises are on their third and fourth, respectively, generations of bloodline CEOs. But others — Walmart and Mars are notable examples — saw a new golden age when their scions handed over the day-to-day reins.
A smooth handoff at Koch could help accelerate its shift to more diverse and cleaner businesses (more on that below.)
Room for Disagreement
Charles Koch isn’t going anywhere quite yet and most days can be found in his office in Wichita.
And another Charles Koch may well be waiting in the wings. The billionaire’s 45-year-old son (who goes by his middle name, Chase) is also getting promoted, to executive vice president, and will continue to run Koch’s venture-capital investments.
The View From Wichita
The Koch business could benefit from some distance from the Kochs themselves. Charles and David, who died in 2019, lifelong libertarians, bankrolled conservative causes — they were the money behind much of the Tea Party’s 2010s rise — and were symbols of both the fossil-fuel industry and corporate interests influencing politics.
The Koch donor network, Americans for Prosperity, also plans to get involved in the 2024 Republican presidential primaries for the first time to back candidates other than former President Donald Trump, according to a memo circulated after their winter donor conference this year in Palm Springs.
“The Republican Party is nominating bad candidates who are advocating for things that go against core American principles,” AFP chief executive Emily Seidel wrote in the memo. “And the American people are rejecting them.”
Neither Robertson nor Hannan are overtly political and don’t currently have leadership roles in the Koch-backed political action committees. Their promotions echo a quiet pivot by the company, which has been ideologically agnostic about its revenue and expanded beyond its oil-and-gas roots into tech and financial investments.
Koch owns just two oil refineries today, one in Minnesota and one in Texas, and transportation fuel (i.e. refining), while a big driver of profits, accounts for less than 5% of its balance sheet.
It’s been investing heavily in batteries and electric vehicle components and has become a financial player on Wall Street through its investment arm, Koch Equity Development. It owns cloud-software company Infor and chunks of Getty Images, British retailer Victoria’s, and has helped finance numerous buyouts.
“It’s stunning just how many different battery supply chain players they’ve taken a stake in,” Vivas Kumar, a former Tesla manager and industry analyst told The Wall Street Journal last year.
- A 2022 study from the Center for Economic Policy Research pushed back on the idea that family control makes companies more long-term-oriented, finding they pay their workers less, are faster to impose layoffs, and spend less on R&D.