When Joseph Buckelew found himself introduced to George E. Norcross III on a golf course, there was plenty not to like.
The Ocean County Republican read the papers, after all. He knew Norcross's reputation as an iron-willed political boss in South Jersey.
Eighteen holes later, though, Buckelew — who's now chairman of Conner, Strong & Buckelew — found something he liked: he could beat Norcross on the links. Handily.
"I won a lot of money, so it was good," Buckelew said.
Buckelew noticed something else, which would eventually become one basis for a 16-year business partnership that continues today. Each time Norcross was beaten, Buckelew said, he'd "go right to the range and work his butt off for another hour and a half."
Today, that business partnership is a wildly successful pairing. Conner, Strong & Buckelew has 350 employees, and more than a billion dollars in premium volume.
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Norcross can let his hair down — or shave it off
There is an important dynamic at play between Buckelew and Norcross. Buckelew can soften the brash and blunt Norcross, and calm him down when needed. Norcross will listen to and take advice from Buckelew, who is described as polite, well liked, affable, respectful and personable — all qualities possessed by Norcross's father; "he's become the father I haven't had since" 1998, Norcross said.
The two share what Norcross calls a "legacy relationship," part of his strategy of surrounding himself with people he has known for decades, whether in his insurance company, politics or at Cooper University Hospital. Loyalty is a core value in Norcross's life, and he lists it first when asked the top lessons he has taught his children.
"I would say a sense of loyalty is almost genetic," he said. "It's not blind, it's certainly earned. And if you expect loyalty in return, you need to practice it in your own life."
Norcross and Buckelew were brought together by Vernon W. Hill II in 1996, when Hill's Commerce Bancorp acquired Keystone National, headed by Norcross, and Buckelew & Associates in exchange for 550,000 common shares valued at $15.4 million.
"I was enamored with Commerce as an enterprise," said Norcross, who first met Hill in the late 1980s. "When I sold my company, to this day, I've kept every share of stock I've ever had, because I believed in that enterprise so much."
The acquisition created an insurance brokerage group for Commerce, and bringing Norcross and Buckelew on board gave Hill — and Commerce — instant influence in New Jersey, with connections in half the state's counties plus state government and multiple authorities.
The hyper-competitive Norcross did well at Commerce, where Hill structured compensation packages, which included stock options, based on performance. Norcross held the largest number of options — even more than Hill — when Commerce was sold to TD Bank, according to the proxy.
"They were among the best years of my life," Norcross said. "It was extraordinarily invigorating, educational, financially rewarding, exciting, and I miss those days. I do miss those days."
Media reports and proxy statements depict Hill's rise and fall at Commerce, and the bank's eventual sale. From a single branch in 1973, Hill built Commerce into one of the fastest-growing banks in the country. But in January 2007, Commerce reported the federal Office of the Comptroller of the Currency and Federal Reserve Bank of Philadelphia had opened an investigation of related-party transactions and other matters. Hill had attracted regulatory scrutiny of his business dealings at the bank, including leases for branches on land owned by Hill, his family or related entities and contracts to his wife's company.
During the investigation, the OCC's process to approve Commerce's applications for new branches — the crux of Commerce's business strategy — became prolonged as regulators imposed new requirements. On June 26, 2007, the board demanded Hill's resignation; a Fortune article at the time called it "one of the most remarkable executive decapitations ever."
On June 29, 2007, the day Commerce publicly announced Hill was stepping down, Commerce stock rose 9.4 percent on expectations it would be bought by a larger bank, according to media reports. Less than a month later, Commerce's board hired Goldman Sachs to identify potential partners, according to the proxy.
The proxy spells out the rest of Commerce's eventual sale to TD Bank: On July 24, 2007, Norcross sent a letter to the board offering to buy Commerce Banc Insurance Services, a purchase he had discussed with Hill earlier in the year. Norcross withdrew the proposal Aug. 21, when the board selected him to chair a special committee to explore a sale to TD, "based on his skill and experience in negotiating acquisition transactions." During negotiations between Commerce and TD, the parties discussed a process for considering a sale of CBIS to Norcross and other members of CBIS's management following the merger. On Oct. 2, Commerce and TD executed the merger agreement and "finalized the procedural terms regarding consideration of a possible sale of CBIS" to Norcross. They also finalized employment agreements for 21 members of Commerce's senior management, including Norcross. Under Norcross's agreement, he'd receive a base salary of $988,000, a target bonus of $500,000 and an "aggregate change in control payment" of $7.6 million.
When Norcross, along with Mike Tiagwad, bought most of CBIS for $121 million, Norcross's change in control payment had been amended to $3.6 million, but the bank also agreed to pay Norcross $4 million as part of a noncompete agreement. The transaction closed Dec. 31, 2007, and Norcross received $7.6 million on Jan. 2.
He pulled in even more with TD Bank Financial Group's purchase of Commerce. Including stock held with his wife and children, Norcross was the second-largest individual shareholder at Commerce, with 1.37 percent of the stock, according to the proxy. When the sale closed March 31, 2008, Norcross got $28.2 million in cash and TD stock valued at $69 million.
"The luckiest thing that happened to me was that I sold my company (Keystone) into a company that went from a modest regional bank into among the most successful and admired banks in the country, and I — stupidly, in some people's eyes — concentrated 100 percent of my assets in one place," Norcross said.
Also lucky: Commerce's sale to TD came just months before the near-collapse of the financial industry in the recession.
Plenty of controversy
The breakup and sale of Commerce wasn't without controversy.
Before Hill resigned, three board members — Norcross; John K. Lloyd, president and CEO of Meridian Health; and Joseph Vassalluzzo, vice chairman of Staples — traveled to Washington to meet with regulators reportedly investigating Hill. They reportedly returned to the board saying regulators had demanded that Hill be ousted. An alternate version of the story has Norcross orchestrating an agreement with regulators to oust Hill so Norcross could cash out in an expected purchase of Commerce by a bigger bank. It was thought that a larger bank would not want the insurance business, so Norcross could buy it back at a discount.
Norcross dismissed the alternate version of that story — "I'm speechless," he said — and said he's never heard of a reported vendetta Hill has sworn against him. Hill, now vice-chairman and co-founder of London-based Metro Bank, declined to be interviewed for this story.
Further criticism popped up last year, when Senate President Stephen M. Sweeney (D-West Deptford) put a provision in a bill to prohibit the State Health Benefits Program from accepting new members, a move seen as helping private insurance brokers like Conner, Strong & Buckelew. Sweeney told The New York Times he had discussed the provision with Norcross, but did not introduce it at his behest; Conner Strong told the Times the proposed changes to the state program would be "immaterial to our total business portfolio."
Sweeney's provision was later pulled. A clause limiting out-of-state medical care for public workers — which was seen as helping Cooper University Hospital — also was eventually pulled.
A state comptroller's report earlier this year analyzing costs in the State Health Benefits Program raised questions about why government entities were paying more for private plans, such as those offered by Conner Strong.
Asked how much of Conner, Strong & Buckelew's business is public entities, Norcross said, "Our public business is less than 5 percent of what we do. We do business all over the country."
And public business as a percent of profitability?
"This is another misnomer that happens in the world I'm in," Norcross said. "The business we do in the public entity space is immaterial to our business platform across the country, and I've said that many times, on the record, and it's not relevant."
Hard work and connections throughout his career have made Norcross successful — and rich.
"No one is going to outwork him. No one is going to outlast him," said Sweeney, who grew up in Pennsauken with Norcross. "He had the same upbringing I had, and I see a guy who made a lot of money and put it to good use. Here's a guy who … never finished college, and he did what a lot of people say is the American dream."
Now, Norcross said he could run Conner, Strong & Buckelew from anywhere in the United States, and continue his "activist chairman" role of Cooper via teleconference from anywhere.
"But there is no doubt that for many, many years that I'm going to be engaged in this state and this region. Now it may be in a far less time commitment, which is very possible," Norcross said. "But I'm into doing things now, so I do them."
What's the best way to make the sale to New Jersey's top power broker? We asked some of the state's most influential people for their advice in preparing for a meeting with Norcross. Here's their advice.
You better have the right answers. There's no question about that. You can't buffalo him — he knows the answer before he asks you the question. Joseph Buckelew
Make a commitment, keep the commitment. Your word means everything. Stephen M. Sweeney
Have a great idea, be upfront and clear on what your objective is, and ask him specifically about what he can do to make your vision successful. If he says he's going to do something, you can take it to the bank. If the bank gets sold, you can still use that deposit. Finn Wentworth
Don't overthink it. He will ask a thousand questions. William P. Hankowsky
Deal from strength — and don't back down. Raymond Lesniak
Be honest and rational. Louis Cappelli Jr.
Being straightforward and honest and loyal are the traits he would most admire. Jerold L. Zaro
Be direct, honest, and stand your ground, and let him persuade you, or get you to the point where you and he can reach an understanding. George doesn't have a lot of patience, so you have to get your belief, your goal, out in front to him. Art Winkler
Be prepared. Be straight. And be prepared. Christopher J. Paladino
Know what you're talking about. Don't waste time. William L. Gormley
Have a good sense of humor. Lewis Katz
Be direct with him. ... He does not countenance 'yes people.' John P. Sheridan Jr.
Be prepared, and know your stuff. He's very smart, but respects a good argument supported by facts. William J. Palatucci
Tell him everything, the good and bad, and leave it to his judgment. John J. Brunetti
Be honest. State the negatives upfront. Under-promise and over-deliver. Jim McGreevey
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