It would have been tough to pick a more challenging time to join a company in the oil and gas industry. In December 2014, when Neal Meadows stepped in to help build DistributionNOW’s tax department, the industry was in the early stages of a major downturn. Oil prices had largely recovered from the recession of 2008 with prices exceeding $100 a barrel in August 2014. However, by the end of 2014, the price had declined to less than $60 a barrel. That staggering collapse was the industry’s worst in nearly thirty years.
Meadows had gained valuable experience in various industries and was ready for a new challenge. The University of Texas–Austin graduate had originally set his sights on making partner at one of the Big Four accounting firms. But in 2001, his career shifted to another industry when he took the opportunity to join dynamic and fast-paced Clear Channel Communications. Meadows never looked back and shifted his goal from Big Four partner to tax department head.
Despite the oil and gas industry’s challenging status, he would get his chance when National Oilwell Varco’s distribution segment had spun off to form DistributionNOW. The new company, which supplies parts to key oil and gas players, was forming its core team. Meadows interviewed with DistributionNOW’s CFO and was offered his first head tax role.
On day one, Meadows started assessing DistributionNOW to align his strategy with the company’s overall goals and objectives. He moved to hire a domestic and an international tax manager. Then, he hired personnel for state tax roles. In building his team, Meadows leaned on lessons learned throughout his previous tenures.
“Over my career, I’ve seen how important it is to hire people you enjoy working with,” says Meadows, who today is DistributionNOW’s vice president of tax. “You need people that all get along with and trust each other. You’re going to be spending a lot of time together, and fit is important.”
Finding the right people was important, but the process had its share of challenges. Because the industry was in a major downturn, resources were scarce and various departments were competing for assets. “I had to sell my vision to the CFO in a downturn and prove to him that I could add value with a robust tax team,” Meadows says.
He focused on amassing quick wins by filing returns and getting hefty IRS and state tax refunds where DistributionNOW was able to carryback net operating losses. Then, Meadows focused on lowering property tax burdens, maximizing tax incentives associated with certain jurisdictions, and discovering creative ways to make a financial impact.
In his first two years with the company, Meadows assembled an eleven-person team responsible for global tax matters. His department works across twenty-one countries and handles financial reporting for income taxes, tax compliance, planning, and other related matters. Meadows considers himself a student of good leadership and says he works to build a committed and engaged team. “Our tax function has a chance to make a big difference for our company, and we can only do that if our people buy into what we’re all doing together and if we each embrace our role in that,” he says.
Meadows has developed his own leadership style by observing others over the past fifteen years while paying special attention to strategies that work and tactics that fail. He believes that employees work best when given special opportunities to thrive. He’s been known to let junior staff members make presentations to the CFO or pair younger employees with veteran colleagues on tasks. A good tax head, Meadows says, should be more of a leader than a boss.
As DistributionNOW moves forward, Meadows is confident that his team will contribute as stability continues to return to the industry. “We’re positioning the company for success as the oil and gas sector starts to grow again,” he says. “And I don’t think we’re going to simply recover—I think we’re going to thrive.” After a few down years, he expects to see more organic growth and a return to a strategy that also includes mergers and acquisitions.
Meadows and his colleagues are adjusting to the changes that tax reform has brought to the US tax code. He’s working with department personnel to scour legislation and adjust internal strategy and capture certain benefits. There is more reason for optimism. Many industry experts are predicting a turnaround for oil and gas in 2018 and beyond. As the economic outlook and other factors improve, Meadows will continue his push to respond to the recovery, exploit changes to the tax code, and pinpoint further opportunities for growth.