Mark Zesbaugh was a hot commodity when he graduated from St. Thomas in 1986 with a degree in accounting. He had three job offers, earned his Certified Public Accountant designation over the summer and went to work for the Big Eight firm of Arthur Young (now Ernst and Young).
“I audited clients,” he said. “I started out doing a lot of grunt work, a lot of copying. I asked myself, ‘Get a four-year degree and become a CPA to make copies?’ I wasn’t so sure.”
It didn’t take long, however, for Zesbaugh to realize the fundamental value of “learning companies inside and out.” And, he added with a smile, “Boy, did I come to realize what I didn’t know!”
Zesbaugh proved to be a fast study. Within four years – at 26 – he became treasurer of Life USA. The promotions came quickly: chief financial officer, first at Life USA, at 29 and at Allianz Life Insurance Co. of North America, which had acquired Life USA, at 34. And then the big one: chief executive officer of Allianz Life at 37.
Not bad for someone who once worried about making copies. But in the process, as he vaulted the ladder, he never forgot where he started and he came to appreciate the grunt work. “I learned so much,” he said. “It’s where I got my foundation.”
The real foundation, he also is quick to point out, came at home. He admired the work ethic and took to heart the values instilled by his dad, a systems analyst, and his mom, a medical records librarian, as well as “tough brotherly and sisterly love” as the youngest of five children.
Zesbaugh’s parents were of modest means and thought he would be able to afford only two years of private college. He started at Gustavus Adolphus before transferring to St. Thomas as a sophomore. He wanted to become a psychologist “because I liked the aspect of working with people,” and took an accounting class taught by Len Minars in order to fulfill a psychology degree requirement.
“Len would say in class, ‘Mark, what’s the answer?’ and I would have it,” he recalled. “It was easy. He pulled me aside one day and asked, ‘Ever think of going into accounting?’ And I said, ‘Never.’ I took another class and I was hooked.”
Minars pointed Zesbaugh in the right direction, and Life USA founder and CEO Bob McDonald shaped him. “He took me under his wing and guided me,” Zesbaugh said of his mentor. “He had sound business skills, and his ethics were impeccable. Everything that my dad and mom taught me about ‘doing right’ at home, Mac did in the business world.”
As a young, boyish-faced executive, Zesbaugh encountered many challenges, including supervising employees who were older and more experienced.
“But the more challenging it became, the more I thrived,” he said. “I fell on my face a lot of times, but somebody always was there to pick me up. Leading people is not easy, and it took me a long time to realize that I wasn’t there just to develop their skills but to get the most out of them.”
When the chief financial officer of Life USA retired in 1994, he told Zesbaugh, “We want you to take the job.” He protested – “I told him, ‘I’m only 29,’ and he said, ‘That’s OK. Mac knows you can do the job.’ I called my wife and said, ‘You aren’t going to believe what just happened.’ ”
Allianz Life Insurance acquired Life USA in 1999. McDonald became CEO and Zesbaugh CFO, and three years later, McDonald showed him a letter while on a business trip. “It was his resignation, saying he was leaving in two weeks and that he was recommending that I take over as CEO.”
“I got a lot of negative reaction fromWall Street people when I made Mark CFO of Life USA,” McDonald said. “They were fixated on how old he was, not how good he was. When I retired in 2002, I got the same reaction – he’s so young. After a short period of time, the Allianz people came back to me and said, ‘We’re glad you retired. Mark’s good!’”
Zesbaugh indeed was “good,” McDonald said, not only because he was “extremely intelligent and talented and got along great with people,” but also because “he always focused on what he was doing. He never pushed for something or tried to feather his own nest. He just worked hard.”
Allianz Life, a subsidiary of the German insurance giant Allianz AG, grew remarkably during Zesbaugh’s five years at the helm. Premiums more than quadrupled to $14 billion as the company concentrated on selling annuities, invested assets increased from $15 billion to $70 billion and annual operating profits grew from $100 million to $600 million.
A combination of the job’s demands, with frequent travel overseas, and differences of opinion with the parent company on Allianz Life’s strategic direction led Zesbaugh to conclude it was time for a change.
“It was a grind,” he said. “I had young kids (now 13 and 10). I was gone all the time, and even when I was home I was working all the time. I was 42. I really wanted to spend more time with my family. I didn’t know my kids well enough.”
So he quit, and has had no regrets. The only things he misses, he said, are “the people and the relationships. I liked the interaction – sitting in front of 1,000 people and talking with them about the company.”
McDonald laughed when asked about Zesbaugh’s people skills. “Ask him about the time he came into a Life USA meeting to announce financials and did cartwheels in tights! He never took himself too seriously.”
Zesbaugh has spent the last two years as a consultant and board director of several companies. He enjoys helping companies develop business plans and raise capital. Last year he began to raise funds to start a new insurance company based in Bermuda, but dropped the effort when capital markets shrunk and his investment banker, Lehman Brothers, filed for bankruptcy. As intriguing as the opportunity was, in hindsight he would not have wanted to run a Bermudabased company and be away from his family: “I learned I won’t commute to my job. For my job, yes.”
Whatever he does in the years ahead, his goal is to lead a “consumer- driven company” – one that that “understands the consumer perspective. Find out what they need and then develop the products to meet those needs.”
If that means Zesbaugh has to do some grunt work along the way, that’s just fine with him. He’ll even make his own copies.
Mark Zesbaugh and St. Thomas
- Joined the Board of Trustees in 2003 and serves on the executive, institutional advancement and student affairs committees; he chairs the latter
- Graduated from St. Thomas in 1986 with a bachelor's degree in accounting and received the Alumni Association's Distinguished Alumnus Award in 2005.
- Became an inaugural member of the Next Generation Committee because he relished the opportunity to involve younger alumni in the life of St. Thomas. "They want to give back, but like I once did, they don't know how to give back. We need to re-engage them - not just asking for their money but also their time and talent."
- With his wife, Jodie, donated $500,000 to be used as matching gifts to create $50,000 endowed scholarships. 15 such scholarships have been established.
- Says one of St. Thomas's primary challenges is to respond appropriately to changing demographics. "It's not just about diversity, but reflecting society and making sure we remain a good university for the next 125 years."