Thinking big

At Virginia’s largest publicly traded companies, the past year has been a constant exercise in challenging the status quo.

Some major changes could be seen at the consumer level, as Dollar Tree Inc. raised its namesake base price point to $1.25, and Capital One Financial Corp. eliminated overdraft fees for its banking customers.

And the model of work itself was evolving, with many companies publicly acknowledging that the future of work is not 100% office bound.

While Capital One declared itself “a hybrid company,” global IT company DXC Technology Co. traded down to a smaller headquarters in recognition of a remote-work future. Altria Group Inc. and CarMax have also indicated that hybrid work will be part of their path forward.

Moves to support more flexible work were a symptom of a historically tight labor market. This trend hit the retail and service sectors especially hard, and Dollar Tree joined other retailers in offering new benefits such as tuition reimbursement and higher wages in a bid to attract workers. CarMax in October 2021 advertised signing bonuses of up to $7,500 for auto technicians, detailers and other service positions.

The seemingly endless onslaught of challenges spun off by the COVID-19 pandemic has forced public companies to make decisions faster than ever before, says Vivian Riefberg, a professor at the University of Virginia’s Darden School of Business who helped corporations navigate crises during her three decades of work with global management consulting firm McKinsey & Co.

“The kinds of decisions that people are being asked to make are unfamiliar, such as how to go back to the office, [and] should there be masking? Should vaccines be required?” she says. Additional challenges of finding and retaining talent and creatively navigating supply chain problems have added to the pile of new decisions on executives’ plates.

In some ways, Riefberg says, this taxing environment has forced corporate leaders into more agile methods of decision-making.

“Now a lot of companies are trying to say, ‘How do we keep that and embrace it as part of who we are?’ instead of going back to the old method of decisions by analysis paralysis,” she says.

Here’s a look at how Virginia’s 10 most profitable publicly traded companies fared during the past year:

Federal Home Loan Mortgage Corp. (“Freddie Mac”)

McLean

2020 revenue: $66.23 billion

Employees: 6,905

Former Wells Fargo executive Michael DeVito took over in June 2021 as Freddie Mac’s CEO, nearly six months after former CEO David Brickman resigned. Freddie Mac is one of two government-backed enterprises (Fannie Mae is the other) that buy mortgages from banks to keep liquidity in the U.S. housing market.

Following DeVito’s arrival, Freddie Mac announced the appointment of two new executive leaders — Jerry Mauricio as chief compliance officer and Dionne Oakley as head of human resources and chief diversity officer.

As part of an effort to promote equity in housing, Freddie Mac announced in November 2021 that it would join Fannie Mae in providing closing-cost credits on multifamily loans to encourage rental landlords to report on-time rental payments to credit ratings bureaus.

“Rent payments are often the single largest monthly line item in a family’s budget, but paying your rent on time does not show up in a credit report like a mortgage payment,” DeVito said in a statement.

General Dynamics Corp.

Reston

2020 revenue: $37.93 billion

Employees: 100,000+ worldwide

This Falls Church-based defense and aerospace contractor was awarded a
$2.4 billion contract option in March 2021 to build a 10th Virginia-class submarine for the U.S. Department of Defense through General Dynamics’ Electric Boat subsidiary in Connecticut, in collaboration with Huntington Ingalls Industries Inc.’s Newport News Shipbuilding division. About one-third of the work is to take place in Newport News.

In addition to the aviation, naval and weapons systems the company has become known for, General Dynamics continued to grow its influence in the information technology sphere through its fast-growing subsidiary, General Dynamics Information Technology Inc. (GDIT).

Also based in Falls Church, GDIT nearly doubled in size when its parent company purchased IT services contractor CSRA Inc. in 2018. That purchase was part of GDIT’s efforts to pursue a larger share of the federal IT services market at the defense, intelligence and civilian levels. Several contract awards in the past year show progress toward that goal, including deals to serve U.S. Citizenship and Immigration Services, the U.S. Navy, the Defense Intelligence Agency and the U.S. Patent and Trademark Office.

Northrop Grumman Corp.

Falls Church

2020 revenue: $36.79 billion

Employees: 90,000

The Falls Church-based aerospace and defense technology company is helping to power NASA’s Artemis project, which aims to return astronauts to the moon by 2025, and to eventually land humans on Mars.

Northrop Grumman has been involved in many facets of Artemis, including designing the lunar terrain vehicle (LTV) that will transport astronauts on the lunar surface.

NASA also awarded Northrop Grumman contracts last year to build the crew quarters for a space station in lunar orbit, and to build Space Launch System (SLS) rockets in support of Artemis through 2031.

The company also won several defense and security contracts, including the January award of a five-year, $1 billion contract from the U.S. Army for production of the Integrated Battle Command System, which links sensors and shooters across the battlefield.

To support the development of its future workforce, in November 2021 Northrop Grumman pledged to contribute $12.5 million to help establish the Center for Quantum Architecture and Software Development at Virginia Tech’s Innovation Campus in Alexandria. Virginia Tech is also investing $15.8 million into the center, which is being billed as a nation-leading educational and research center for quantum information science and engineering.

Capital One Financial Corp.

McLean

2020 revenue: $31.64 billion

Employees: 52,000

In December 2021, Capital One, the country’s sixth-largest retail bank, became one of the largest U.S. banks to eliminate overdraft fees. The fees have come under increasing scrutiny in recent months from federal regulators, with consumer advocates saying such fees disproportionately impact minority and low-income customers.

“The bank account is a cornerstone of a person’s financial life,” Capital One CEO Richard Fairbank said in a release. “Overdraft protection is a valuable and convenient feature and can be an important safety net for families. We are excited to offer this service for free.”

Capital One entered the competitive premium credit card market in November 2021 with the launch of the Venture X card. The card adds to Capital One’s growing array of travel services, including a line of Capital One-branded airport lounges, one of which is slated to open in 2022 at Washington Dulles International Airport.

Capital One’s name was also added to another notable physical space that opened in October 2021 near its headquarters. Capital One Hall is a 125,000-square-foot performing arts venue in Tysons that also includes a rooftop outdoor public park.

On the investment banking side, in November 2021 Capital One purchased TripleTree LLC, an investment banking advisory platform serving health care technology and services companies.

In June, Fairbank announced that Capital One would move to a hybrid work model. Plans to reopen U.S. offices in September 2021 were delayed indefinitely due to the spike in COVID-19 cases caused by the delta and omicron variants.

Dollar Tree Inc.

Chesapeake

2020 revenue: $25.51 billion

Employees: 130,000

After 35 years selling items for $1, Dollar Tree announced in September 2021 that it would raise prices on most items in its stores to $1.25. The retailer, which operates more than 15,500 variety stores under the Dollar Tree and Family Dollar brands, also began selling items for $3 and $5 in 2021.

“Lifting the $1 constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” President and CEO Michael Witynski said in reporting the company’s third-quarter earnings.

Dollar Tree entered 2022 amid a potential proxy battle with activist investor group Mantle Ridge. In December 2021, Mantle Ridge nominated 11 new members to the company’s 11-member board, whose members are up for re-election during Dollar Tree’s 2022 annual meeting. The group also asked the retailer to consider rehiring former Dollar General CEO Richard Dreiling as chairman and CEO. A Dollar Tree statement called the move “unwarrantedly aggressive and hostile.”

In its hometown of Chesapeake, Dollar Tree has been working through subsidiary Summit Pointe Realty LLC to develop a mixed-used community that is transforming that area of the city. Summit Pointe is built around Dollar Tree’s 12-story corporate headquarters tower and includes apartments and office buildings, as well as dining and public park space.

Performance Food Group Co.

Goochland County

2020 revenue: $25.08 billion

Employees: 20,000

Performance Food Group acquired conven-
ience store supplier Core-Mark Holding Co. Inc. in September 2021 for $2.5 billion in stock and cash, a purchase expected to add about $17 billion to PFG’s annual sales. The deal is expected to expand PFG’s geographic reach and grow its footprint in the convenience store market.

PFG has a network of more than 150 distribution centers in the United States and Canada, providing food to more than 300,000 locations, including restaurants, businesses, schools, hospitals, retail outlets and theaters.

Claudia Mills was hired as PFG’s first-ever vice president of diversity and inclusion in May 2021. Mills had previously worked for Richmond-based Altria Group. Additional management changes came in early 2022, as Craig Hoskins was appointed president and chief operating officer in January, having previously served as executive vice president and CEO for the Performance Foodservice division. At the same time, Patrick Hagerty was elevated to executive vice president and chief commercial officer. Hagerty had served as executive vice president of PFG and CEO of Vistar, PFG’s vending division, since 2018.

CarMax

Goochland County

2020 revenue: $21.42 billion

Employees: 27,000

The nation’s largest used-car retailer, CarMax established a new Richmond presence in September 2021 with CarMax Midtown, a 120,000-square-foot space in the Sauer Center on West Broad Street. The facility offers a glimpse at what modern office spaces will look like in the years to come, with individual and collaborative workspaces designed for a hybrid workforce.

Just as more workers are embracing hybrid solutions, CarMax executives believe they are benefiting from the company’s ability to offer a hybrid car-buying experience.

“We provide the ability for customers to buy a car 100% in store or 100% online,” President and CEO Bill Nash said in a December 2021 earnings call. “We have observed that the vast majority of our customers who buy digitally still elect to take delivery in our stores. This is another proof point that our ability to offer seamless integration across digital and physical transaction is providing value to our customers and is a key differentiator for us.”

CarMax added to its digital capabilities in March 2021, when it entered into an agreement to purchase full ownership in vehicle research website Edmunds.com in a cash and stock deal valued at $404 million, including the $50 million minority stake CarMax purchased in Edmunds in 2020.

CarMax also announced its commitment to reach net-zero carbon emissions by 2050.

Altria Group Inc.

Henrico County

2020 revenue: $20.84 billion

Employees: 7,100

As U.S. tobacco consumption shifts from traditional cigarettes to e-cigarettes, Altria — the largest tobacco company in the United States by revenue and volume — has faced challenges in its efforts to compete in this new market.

Altria and former subsidiary Philip Morris International Inc. were forced to pull their IQOS and Marlboro HeatSticks heated tobacco products from the U.S. market after the federal International Trade Commission (ITC) ruled in September 2021 that the products violated patents held by rival
R.J. Reynolds Tobacco Co.

Sales of traditional cigarettes faced a potential threat from a spring 2021 announcement that the federal Food and Drug Administration intended to ban menthol flavoring in cigarettes. Altria said in a response posted on its website that such a move would be ineffective and could create an illicit market for menthol products, negatively impacting excise taxes and jobs. An update on the proposed ban is expected from the FDA in April.

Altria sold its Ste. Michelle Wine Estates division for $1.2 billion to New York-based private equity firm Sycamore Partners Management LP in an all-cash deal that closed in October 2021.

Kathryn B. McQuade became the first woman to chair Altria’s board of directors, after being elected in May 2021 to replace the late Thomas F. Farrell II, who died in April 2021. McQuade first joined Altria’s board in 2012.

The company also made a $3 million gift to Richmond-based nonprofit Better Housing Coalition for the development of affordable housing in the region.

DXC Technology Co.

Ashburn

FY 2021 revenue: $19.58 billion

Employees: 130,000

DXC Technology, which runs IT systems for governments and companies across the globe, made the move to become a “virtual first” company in 2021, leaving its Tysons headquarters for a smaller office space at One Loudoun in Ashburn.

The move to virtual was led by Chief Operating Officer Chris Drumgoole, who was appointed to the post in August 2021. Drumgoole had been the company’s chief information officer and was succeeded in that position by Kristie Grinnell. DXC also appointed Brenda Tsai as executive vice president and chief marketing and communications officer in June 2021.

In February 2021, DXC rejected an unsolicited acquisition offer from Paris-based Atos SE. DXC’s board stated at the time that the offer, rumored to be around $10 billion, was too low.

Dominion Energy Inc.

Richmond

2020 revenue: $16.13 billion

Employees: 17,000

The politically powerful Richmond-based utility that provides electricity to more than 7 million customers in 16 states made moves in 2021 that leaders say position it for a cleaner energy future.

Dominion sold its Questar Pipelines subsidiary to Las Vegas-based Southwest Gas Holdings Inc. in December 2021. In announcing the $1.975 billion sale, CEO Robert M. Blue said it will allow the company “to focus even more on fulfilling the energy needs of our utility customers and continuing growth of our clean-energy portfolio.”

Dominion filed plans with the State Corporation Commission in November 2021 for construction of its Coastal Virginia Offshore Wind (CVOW) project, which will install 180 massive wind turbines 27 miles off the coast of Virginia Beach. Construction is expected to take place from 2024 to 2026. The estimated cost of the project has climbed from $7.8 billion to $9.8 billion,
due to inflation and infrastructure costs.

In support of CVOW, Dominion announced in October 2021 that Spanish company Siemens Gamesa Renewable Energy S.A. will build the first U.S. offshore wind turbine blade manufacturing facility in Portsmouth.

In November 2021, Dominion settled claims by Virginia regulators that it had taken in $1 billion more in profits than allowed under state law between 2017 and 2020, with the utility agreeing to refund $330 million to Virginia ratepayers and reduce its annual rates by $50 million.

Dominion’s longtime chairman, president and CEO, Thomas F. Farrell II, died in April 2021, one day after retiring and passing his title of executive chairman to Blue. Farrell, who had battled cancer, was also chairman of Altria Group Inc.’s board of directors, before unexpectedly announcing his retirement in March 2021.