Passionate About the Future...
An Interview with Peter Picknelly Sr.
by Kitty Axelson Berry
Passionate About the Future. You hear a lot about the old man who will run the company until he dies, and then from the grave I think I've done the opposite...
Often, it is the most amiable and the least rushed person who comes out on top. So it is with Peter Picknelly Sr. Nearly as often, the unique challenges of that position turns a winner cold and self-important. Not so with Peter Picknelly Sr. You couldn't ask for a nicer reception than the reception you get with Picknelly. Not only does this guy answer his own telephone, it would appear, but he does it courteously, as if your call is a special moment for him.
During this Related Matters interview, Picknelly gives his full attention to the act of revealing himself as a family businessperson. Yet he doesn't hesitate to halt mid-sentence to watch the wonders of a falcon in flight high outside his 25th floor office.
Perhaps it wasn't always so with Picknelly, this feeling that he tackles each task with devotion and concentration, and keeps in mind not only the short-range effects of his decisions but the long-range ripples.
Perhaps Picknelly was once, in the common lingo, an "operator," a big ego self-importantly rushing around, effectively killing time. In his files, one imagines photos at ribbon-cuttings and charity balls, shaking hands with other movers-and-shakers. But today his walls exhibit just a few tantalizing mementos: Peter with Bill Clinton, Peter with Bill Weld, a hand painted plaque outlining the ethical high-ground for conducting business responsibly.
Clearly, Picknelly has made good use of time without forfeiting the moment. He started in the mid-'60s with the then-struggling Peter Pan Bus Lines Inc., now the second largest bus service in the U.S., with over 800 employees. He has acquired Monarch Place, including the largest office complex in Springfield, Monarch Tower, and Sheraton Hotel, with 305 rooms the largest hotel in Springfield, West Springfield-based MassWest Insurance Company, and an impressive array of real estate. One of his current passions is to create in Springfield a riverside gambling and entertainment mecca.
But that's not the passion he wants to speak of today. What Picknelly wants to discuss is the future. The future of his children. "We don't do family picnics, Sunday dinners...I guess our family is close in a business way more than in some other ways," he explains. And it's in a business way that Picknelly is preserving the family roots.
This interview took place in June 1995.
Related Matters: Let's start with a few facts about your company, such as its size, number of employees…
Peter Picknelly, Sr: That would be difficult because we are extremely diversified now. I'd like to just talk for awhile and see how it goes. And you'll let me know if that's all right, and what other questions you need to ask, OK?
See, the family business—the bus company—was founded by my father in 1933. I was the only son. I had three older sisters, none of whom were involved in the business to any extent. Growing up in a family business, I really don't know when I started working for the company! As a kid, I'd come to work with my father after school and during summers. I always knew I wanted to be in the bus business.
After I got out of school—I was born in Springfield and went to public schools, like Technical High School, which doesn't exist anymore, and then Northeastern for awhile, yet I never had any real interest in doing anything but the bus company. I went right into the bus company.
But the gist of my story, and what makes Peter Pan somewhat unique, is this: When I was in my 20s and my father died when I was 31, I knew the operations of the business, but not the administrative and finance ends. The company was small and struggling, with about 15 busses, at the time my father suddenly passed away. He had just had surgery and the prognosis was that he would be OK, when he had a heart attack and passed away. Just hours or days before, he'd been alive and relatively healthy. Suddenly, I had the responsibility of running the family company.
Frankly, I was unprepared. And although my dad had a will, it had been hastily prepared. So besides having the responsibility of the business, I had a lot to learn--and a lot of problems to deal with--regarding taxes. In those days, estate taxes had to be paid within nine months of the death! I had a very difficult time learning the parts of the business I didn't know and at the same time facing this tax that the company couldn't afford.
Because of that experience I've faced estate planning differently than most entrepreneurs. You hear a lot about "the old man who won't let go...and will run the company until he dies...and then he'll run it from the grave." I think I've done somewhat the opposite.
Estate planning is something that needs to be addressed and updated every few years. Circumstances change and there are always changes in the tax laws. I recently hired an estate planner to review my plan, will and trust to be sure it is all up-to-date. It's prudent to do that from time to time.
Let me go back again. What happened was that shortly after my father died, in January of 1964, there was a World's Fair in Flushing, New York. It was a stroke of luck for us. Running the busses there enabled us to pay those estate taxes.
…Getting back to your original question about the size of the company: It's hard to tell you that because I've diversified substantially. This building—Monarch Place—and the Sheraton Hotel next door are major assets, and I own a substantial amount of real estate under what I call Picknelly Properties. And there's WestMass Insurance Co. and Peter Pan Bus Lines, which will come close to grossing $50 million this year. The total gross is about $106 million; the bus company is about half.
But I don't own the bus company. My kids own it. My son Peter is the controlling share owner. Paul (that Peter, Paul and Mary Jean are my children's names has nothing to do with the music group) and Mary Jean are minor stock owners
I'm a minor stock owner, too. The only reason I'm a stock owner at all is that it takes time to divest yourself! Following the advice of the tax people, who want me to die a pauper, and that's OK with me, I own something like one percent of the controlling stock and my kids own the rest. So what I do, I do in my kids' name. That's so that someday, when I'm not here, they won't face a huge estate problem.
But you're still young and in apparently excellent health. Do you ever worry that you'll be like King Lear, you'll give everything to your children and then you'll be turned out?
No, I don't worry at all that my kids will be like that.
Here's the thing: My son is now 35, and when he was 31, I was 60 years old. That is a special time, beginning then…
Yes, in Buddhism turning 60 marks a turning point from the "social" to the more spiritual "Being"…
That's interesting. When I turned 60, I felt it was time for Peter to run the bus company. Although it was very difficult, I literally walked out the door.
I can't say I never go back. The company is four blocks away--come to the window here, I'll show you--and I often go to the gas station on the corner there. Sometimes I'll walk over and when I see employees I know from so many years there, I'll kiddingly say, "My kid fired me! I'm not supposed to be here!"
What I do is this: I look at the bus company's financial statements (and frankly, they had a very good year last year). If I occasionally see something I think is shockingly wrong--which is rare--I'll call my kid and I'll say, "Change it" or "Don't do it," and he does.
It's a matter of, well…respect. Legally, I have no power. If a newspaper refers to this building saying that I own it, that's not true. I don't own it: My kids own it. My son Paul, and Mary Jean own 90 percent of it, and Peter owns some. Peter owns most of the bus company, and Paul and Mary Jean own some of it...They may someday all piss on my grave, but I don't think so. They'll all have plent
And they won't have to face the same problems that I faced when my father passed away. I maintain $26,000,000 worth of insurance on my life, which the estate planners say is more than adequate to pay the estate tax upon my death.
How did you figure out how to divide your assets and holdings? Did you try to divide equally or by ascertaining merit or…?
In a perfect world, it would be nice to give equal shares to my kids and I guess I tried to do that. But in the real world that's not possible. What is a building worth? What is a company worth? Eventually, my kids will own 99 percent and I will own one percent. That will be true of everything that's "mine," including the new gambling company we're about to announce.
What fills your days now?
Well, I'm the boss. As a legal matter, I'm not. But if I tell my kids to do something, they respect me and they do it. They know that the reason they have the ownership of these things is because I've made it so.
Getting back to the question of dividing your holdings, which of your children is the eldest? Peter? And does daughter own as much?
My daughter is the eldest, Peter is the next. But he's the oldest son.
Picarillo is the name, by the way. My father came here as a young man from Avalino near Naples, at a time when it wasn't popular in this country to be Italian. Originally he went to East Orange, New Jersey, and then here. In the Italian heritage, the eldest son is normally the one who carries on the family business. I was the youngest child with three older sisters, but I was the only boy. When my father died, he left the shares of the bus company to me and required that I pay my sisters cash, which he didn't have, nor did I.
What reactions did your family have when you told them you'd decided to transfer everything to them?
Paul, the youngest son, had worked for the bus company (for years) and was in his brother's shadow to some extent, so buying this building and the hotel next door two years ago gave me the opportunity to give him a major asset, an opportunity to get out of the shadow. He is the president. And of course it's an opportunity to reduce any sibling rivalry that might be there.
Are you close as a family?
We're close in a business way more than other ways. We don't do family picnics, Sunday dinners...I guess we see each other so much during the week (that we don't need to). In the business we're close.
What about the next generation? Actually, do you have grandchildren?
Paul has a son who'll be six in July and a daughter, 12. Mary Jean isn't married. Peter and his wife would like to have children someday.
Are there family meetings?
Not often enough. At least every couple of months the four of us spend the evening together, most often at my house, and we'll discuss whatever issues are pending.
And the wives? Are they part of those meetings?
Wives don't get involved, though Peter's wife Melissa works for the bus company.
You mentioned earlier that this is your third marriage. Do your children have the same mother?
Yes, my first wife...
That probably makes it less complicated. Did your ex-wives want a greater role in the business, or shares?
No, because I've always used pre-marital agreements.
I'm trying to imagine what it's like when there are business, or philosophical, disagreements. For instance, working to establish casino gambling in Springfield could be a source of disagreement in the family. Are there serious disagreements?
Not much. One time, when the three kids were not in agreement, I said, "I don't want to be a referee. Work it out! If you don't, I'll make the decision." But at the meetings and in daily life, I'm the boss. I have a story: When the business was highly regulated, which it isn't now, there would often be meetings with government regulatory organizations. And it would happen occasionally that at a critical time during a meeting or a hearing, my attorney, Frank Daniels, would say to me, "Here are the issues. What do you want to do?" I'd say, "You make the decision. I want somebody to blame.
Have you figured out why it is meaningful to you to be a family business? Why not pass it along to someone else?
I guess it's mostly that a family business is 24 hours a day seven days a week, and I don't think an employee has that mindset. When it's yours and you run it, you work hard. I love what I do, frankly. If you want to call me Sunday morning at seven o'clock, I'll be here. Christmas morning at seven o'clock, I'll be here. My business is my vocation and it's my occupation, and it's kind of all I do. I've never played a game of golf in my life. I do like to travel, and I occasionally do, but if I'm in Springfield, I'm here.
That sounds tough on the other people in your life! But let's move on. Is Peter Pan, or Monarch or the Sheraton managed like a family, with an emphasis on loyalty, security, respect..
Well, the basis of our management philosophy at the bus company and the other family-operated businesses is a team or family atmosphere.
Do you share financial information with employees?
Yes, not only at the bus company, which is a public utility so the financial information is open, on file with the DPU (Department of Public Utilities) and the ICC (Interstate Communications Commission), but also at the Sheraton, Monarch Tower, MassWest...We share financial information with our employees and members of management, usually on a monthly basis. Our mindset is to be open. We tell them when we're doing good, and when we're not. I guess that's a team or family atmosphere.