Steve Demetriou, who as CEO of Jacobs Solutions Inc. since 2015 led the industry giant's successful corporate rebranding and growth, will step down in January from the position. Company President and Chief Operating Officer Bob Pragada will succeed him, the Dallas-based firm announced on Sept. 15.
Demetriou will continue as executive board chair "for a minimum of two years" and Pragada will join the board, the publicly traded firm said in the announcement. The succession will take effect on Jan. 23, the date of the firm's annual shareholder meeting.
As of Aug. 29, Jacobs adopted the new name for its parent company, altered from Jacobs Engineering Group Inc., a change that "more closely aligns with Jacobs' public identity as a global technology-forward solutions company," the company said.
The firm reported revenue of $14.1 billion last year, up from $13.6 billion in 2020, with 55,000 employees.
"Steve Demetriou can be credited for the transformation of Jacobs making a number of strategic yet bold moves to re-rate the company," said Jamie Cook, lead industry sector analyst at Credit Suisse, in a Sept. 15 note to investors, also referring to his sale of Jacobs' energy, chemicals and resources division to Worley in 2018 for $3.2 billion. It had 57,600 employees at the time. Under Demetriou, Jacobs also acquired major player CH2M in 2017, a key transformational move.
Cook added that through "strategic acquisitions," he "pivoted Jacobs’ portfolio to higher margin growth markets. The re-rate was so successful many of [Jacobs'] peers have followed the same playbook."
The CEO also pushed for new initiatives to diversify its executive ranks and board, with the company saying they now are 67% and 50% diverse across gender and ethnicity, He also added new corporate focus on climate change response and ESG, according to Jacobs.
Jacobs reported on Aug. 9 net earnings for its fiscal third quarter from continuing operations of $196 million, compared to $166 million for the same quarter in 2021. The company reported quarter revenue of $3.83 billion, compared to $3.58 billion for the same period last year, and $11.04 billion for the nine-month period, compared to $10.51 billion for the same nine months in 2021.
About 27% of Jacobs' revenue comes from non-construction-related markets in health and life sciences (11%) and national security (16%). Another 11% falls under the category of space, some of which involve facility construction for the National Aeronautics and Space Administration, with other revenue from consulting or engineering related to flight control and operations and equipment.
Cook added that Pragada "has been instrumental in developing and leading the successful execution of Jacobs' strategy."
Pragada joined Jacobs initially in 2006 as a vice president, but left in 2014 to become CEO of The Brock Group, Houston, one of the largest U.S. industrial services subcontractors. He returned to Jacobs in 2016 as a group president. Pragada is a graduate of the U.S. Naval Academy, and began his career in the Navy as a civil engineer corps and construction battalion officer.
He was cited in 2021 by WashingtonExec magazine with its Chief Officer Award for a public company, based on "innovation, expertise, impact and thought leadership," it said.
In sharing his view of the impact of inclusive leadership at ENR's Top Young Professional conference last year, Pragada, an Indian-American, said Jacobs operates with inclusivity a key factor in its growth. He noted recently announced initiatives to increase use of minority and women suppliers and to invest $10 millon to support Black education.
The executive stressed the importance of accountability, noting required inclusion and diversity goals for all Jacobs' managers “This is a walk the talk," he said. "We've made it part of our culture day in and day out. We are far from there, but we hold ourselves accountable."
Going forward, Pragada said "It is an exciting time for Jacobs. We have just launched our bold new strategy and are at the forefront of our industry."