Looking for a quick who’s who of Orange County business and community leaders?
You could do worse than scan the board of directors at Santa Ana-based First American Financial Corp.
The title insurer’s recently expanded, 12-person board includes as many recognizable names as any other in the county.
Directors “are not just friends of management, they’re people with serious business experience,” said Michael McKee, chief executive of Bentall Kennedy U.S., a Seattle-based real estate investment advisory firm and the former chief executive at Newport Beach’s Irvine Company.
Six First American directors, including McKee, are current or past members of the Business Journal’s OC 50, our annual listing of the area’s most influential business leaders.
A seventh director, Virginia Ueberroth, is the wife of longtime OC 50er Peter Ueberroth and chairs the Ueberroth Family Foundation.
First American’s board goes beyond locals.
Members also include William Davis, premier of Canada’s largest province of Ontario from 1971 to 1985. He works alongside other directors with ties to the mortgage, real estate and legal industries.
“There’s a lot of high-caliber people on the board,” said director Thomas McKernan, chief executive of Costa Mesa’s Automobile Club of Southern California.
The name recognition of directors reflects the stature of the company, according to McKee, who last month was named to the board along with McKernan.
“I look at First American as an icon in some respects for Orange County, not just in their national reach, but internationally,” McKee said.
Long History
• Headquarters: Santa Ana
• Business: title insurance
• 2010 revenue: $3.9 billion, down 3.5%
• 2010 net income: $129 million, down 3.7%
• Market value: $1.7 billion
• Founded: 1889
• 2010: former parent spun off title business, created Corelogic
First American values experience on its board in keeping with the company’s venerable history. Founded by C.E. Parker in 1889, First American is believed to be the county’s oldest company.
Seven directors count more than 15 years on First American’s board.
“Longevity is a plus,” said Parker “Park” Kennedy, First American’s executive chairman and former chief executive of predecessor company First American Corp. “We want people who have a familiarity with our company and our industry.”
Longtime directors include Ueberroth, who’s been on the board since 1988, and real estate investor George Argyros, who runs Costa Mesa-based Arnel & Affiliates.
Argyros has been on the board since 1988, minus a four-year period when he served as U.S. ambassador to Spain.
Chairman emeritus Donald Kennedy, 92, called Argyros “the boy developer” early in his career, according to Parker Kennedy, Don Kennedy’s son.
The senior Kennedy stepped down from the board in 2008.
Like others on First American’s board, Argyros initially was a First American customer.
“He was a loyal customer, and when he became a successful businessman we thought he’d be a natural on the board,” Park Kennedy said.
James Doti, president of Chapman University in Orange, is a relative newcomer to First American’s board, having joined in the mid-1990s. He describes board meetings as “collegial,” which reflects the personality of the Kennedy family.
“There could be some hot issues, but Don and Park would help to smooth those over. They both have a great sense of humor,” Doti said.
The Split
The board has had its hands full with last year’s split of First American Corp.’s core title insurance business from its faster-growing data and mortgage information business, which now is Santa Ana-based CoreLogic Inc.
First American directors held 10 meetings in 2009—a few more than in a typical year—according to regulatory filings.
Between direct compensation and stock, First American directors on average earned about $150,000 in 2009, according to the company’s most recent proxy statement. Figures for 2010 haven’t been filed yet.
The First American-CoreLogic spinoff first was proposed in early 2008.
First American’s board, which had counted 17 members, also split. Park Kennedy remained executive chairman of both First American and CoreLogic, which counts nine directors.
Three of CoreLogic’s existing directors have ties to Highfields Capital Management LP, one of First American’s largest institutional investors prior to the split.
One current First American director also was brought on by Highfields in 2008. Another Highfields-backed member, Glenn Christenson, announced his resignation from the board last week.
Other unaffiliated directors went to the company where they’d be the best fit at the time of the split, according to Kennedy.
D. Van Skilling, the former chief executive of Costa Mesa’s Experian Information Solutions Inc. and a First American director since 1998, took over the lead director role at CoreLogic.
“He was a data guy,” Kennedy said.
The split should make life easier for the boards of Corelogic and First American, according to Doti.
“When I started, it was mainly a title company,” he said. “Now (after the split), we’re more focused on title work again and not spending as much time on (data-related) acquisitions.”
Last month’s appointments of McKee and McKernan fill holes for First American’s board, according to Kennedy.
“The qualities we felt we needed were people with strong operational backgrounds and experience with large companies,” said Kennedy, who along with Chief Executive Dennis Gilmore is one of two board members who have held executive roles at the First American. “It just happened that both of them were in Orange County.”
The company was “looking for someone with a similar operating experience,” said Auto Club’s McKernan, whose company was the fourth-largest auto insurer in California and sixth-largest homeowners insurer in the state last year.
Familiar Strategy
There’s plenty of similarities to the role of the directors at First American and at Irvine Co., said McKee, who left the real estate developer and landlord in 2008 after a long stint serving as the company’s No.2 executive, behind Chairman Donald Bren.
Even though Irvine Co. is privately held, Bren “always wanted to run it with the discipline of a public company,” McKee said. “If you look at the caliber of people on the board (at First American), it’s quite similar.”
