Because he can!

[ by Melanie Gretchen ]

Andrew J. Hall, ex-Citi oil trader, is the individual who left the big city and his $100 million pay package to live on a farm in Reading, VT, where, among other things, he makes handmade lavender soap and grass-fed Angus beef. 

Oh, by the way.  We failed to mention that farming is not Andrew Hall's full time professional.  He's currently the CEO of Occidental Petroleum Corp.’s commodity-trading unit Phibro.

Phibro was founded in 1901 as Philipp Brothers.  Engelhard acquired Phillip Bros. and turned it into   disvion of its Mineral & Chemicals Corporation.  In 1981, the company was spun off as Phibro Corporation, and later that same year the company acquired Salomon Brothers, creating Phibro-Salomon Inc.  Phibro Energy, Inc. was established in 1984, absorbing the oil department of Philipp Brothers.  In 1986, the combined company removed the Phibro name from the parent company.  In 1993, Phibro Energy, Inc. became the Phibro Energy Division of Salomon Inc.  It was renamed to simply "Phibro" in 1996.

In 1997, Salomon was acquired by Travelers Group, which merged with Citicorp to form Citigroup in 1998 - thus Salomon became an indirect, wholly owned subsidiary of Citigroup. 

Phibro came to the notice of the public when its leader, Andrew J. Hall reportedly was seeking a $100 million bonus from Citigroup, which had been bailed out by U.S. taxpayers in 2009.  Reportedly Phibro was the main source of the $2 billion in pretax revenue Citigroup received in commodities trading.

In October 2009, Occidental Petroleum announced it would acquire Phibro from Citigroup, estimating its net investment at approximately $250 million.  Phibro is now part of Oxy's "Midstream, Marketing and Other segment", which includes Oxy’s gas plant, pipelines, marketing and trading and power generation operations.

Hall's Background.   Mr. Hall, a native Briton, graduated from Oxford in 1973 with a degree in chemistry, and subsequently spent his 30-year career at Phibro.  There he wagered on skyrocketing oil prices in the 1990s, earning the name "God" by competitors.  In Reading, he is known for razing homes, the lower tax rate he pays on some of his land, and a dispute with a neighbor over power lines.  Simply put, he's not one of them.

Nevertheless, it would seem Mr. Hall, 62, has every intention of making a place for himself.  On the contrary: he has been putting down roots – buying property in Reading – since the 1980s.  In December filings, he defended his 18th-century farmhouse and 3 guest homes as "modest in scale," compared with other ‘high-end’ dwellings in Vermont."  To date, land he owns totals $6 million, which he has enrolled in a state program called current use, which lowers taxes on farms and forests to encourage agriculture and curb commercial development.

Over time, he and his wife, Christine, have filled in their physical presence.  Mr. Hall's farm makes wood-fired maple syrup, which sells for $65 a gallon, in addition to botanical soaps, ice cider, wildflower honey, eggs and Berkshire-pig breakfast sausages, available in Vermont and Connecticut stores and online.  Recently, the businessman opened the Hall Art Foundation to display displays works from the commodity trader’s private collection in a renovated dairy farm.  For now, the Halls has carved out a niche for themselves.

"It’s kind of an enlightened Downton Abbey.  You can come up to a place like this, you can acquire some land, you can exercise vision, you can do some things that really have an impact." -- Laird Bradley, principal broker at Woodstock, Vermont-based Williamson Group Sotheby’s International Realty, referring to the TV drama about an English estate.

For further details, go to [Bloomberg, 3/12/13].

To contact Melanie Gretchen: melanie@compliance-insights.com.