End Of An Era: Ed Rust Retires In September

[Hidden Blog note: Among my reasons for leaving State Farm, this eventual reality was one of them. Any shake-up at the top, especially after a 30-year run, portends a change in culture. Having sat in meetings for years with each of them, I'd describe Ed in a word as "folksy," and Michael as "competitive." The fact that one goes by the abbreviated "Ed" rather than "Edward" and the other goes by the more formal "Michael" rather than "Mike" is, to me, symbolic of their personalities. Michael will do a fine job, but I'm glad to observe from afar.]

BLOOMINGTON — State Farm President and COO Michael Tipsord will become CEO in September, bringing the "end of an era" of having a Rust in charge of the Bloomington-based insurer.

Ed Rust Jr. will remain as chairman of the board. The change was announced Thursday morning; neither man was available for interviews.

Rust, 64, the company's longest-serving CEO, will leave that job after 30 years. A graduate of Bloomington High School and Illinois Wesleyan University, Rust joined State Farm in 1975 and succeeded his father as CEO and chairman in 1985.

Tipsord practiced law before joining State Farm as assistant tax counsel in 1988, and was progressively promoted starting in 1995. He is a board member of IWU, the Brookings Institution and Navigant Consulting Inc., and is a member of the board of visitors for the University of Illinois College of Law.

Two years older than Rust, John Penn, now vice president of the Laborers' International Union Midwest Region, was a teammate of Rust on high school wrestling and track teams.

"If I knew where he was headed, I would have carried his books for him," Penn said Thursday. "Ed was always willing to work with you. He always had a kind word. He was a team player."

State Farm is ranked No. 41 on the Fortune 500 list of largest companies. It has more than 65,000 employees and more than 18,000 agents; about 15,000 employees work in Bloomington-Normal.

Last year, State Farm finished with a profit of $3.4 billion and a net worth of $80 billion, but the company and its leadership have remained loyal to its Central Illinois roots.

In 2010, for instance, State Farm and 10 taxing bodies negotiated a property tax reduction for the company's 54 Twin City properties. The insurer had initially sought an $84 million reduction in its $132 million assessed value, which put millions at risk for schools and government bodies, but the final agreement limited the company's tax assessment increases to no more than 1 percent each year for five years.

"State Farm, under Ed Rust's leadership, has been active and proactive in the community," said David Taylor, president of United Way of McLean County, who worked at State Farm for 18 years. "State Farm's impact is felt in all parts of the community, especially in the human services sector."

"It’s an end of an era," added Normal City Manager Mark Peterson. "The Rusts have been in charge for a long, long time. This will be a dramatic change. Michael Tipsord has local connections … knows the community. I think it will be a positive thing, especially with the fact that Ed Rust will continue to be chairman of the board.”

Along with numerous business connections, Rust has been heavily involved in national education initiatives, including No Child Left Behind.

Bloomington District 87 Superintendent Barry Reilly, who has “known Ed since his son, Barry, attended Bloomington High School in the early '90s,” called him a "great guy" who's engaged in the community.

He also pointed to his "significant influence,” including helping to create the Illini Data System for teachers to track and forecast student academic progress.

The Illinois State University State Farm Hall of Business and the Illinois Wesleyan University Harriett Fuller Rust residence hall bear witness to the company's ties to local higher education.

“Ed has been a very loyal and active member of the board of trustees at Illinois Wesleyan for a very long time," said IWU President Dick Wilson. He described the relationship between IWU and State Farm as “broad and deep.”

“The success of the university has been tied to State Farm,” said Wilson, noting Tipsord, like Rust, is an IWU alumnus.

“We’re ecstatic for both of them,” said Wilson.

Rust has overseen tremendous growth at the company, including building of the Corporate South complex and more recent creation of hubs in the Atlanta, Ga., Phoenix and Dallas metro areas.

“He has carved a path for our community to be as successful as it has been," said Kyle Ham, chief executive officer of the Bloomington-Normal Economic Development Council. "We are looking forward to working with the new CEO.”

McLean County Board Chairman Matt Sorensen said State Farm is a massive contributor to the ongoing success and stability of McLean County.

"Mr. Rust has been at the steering wheel for over 30 years," he said. "We owe him and the organization a great deal.”

Added Bloomington Mayor Tari Renner: “Ed Rust has been an outstanding leader — within his company and the community. I’m glad he’s still staying on as chairman of the board.”

Rust earned $12.86 million in 2014. His compensation is a base salary plus at-risk incentive compensation that is based on growth, financial results, customer retention and employee satisfaction for the previous three-year period.