CEO Bill Oesterle wants to re-enter politics to restore state's image

Bill Oesterle is quitting as CEO of Angie's List, saying he wants to re-enter state politics and help repair the "shellacking" Indiana's image took from the passage of the "religious freedom" act.

The news caught both the state's business and political communities by surprise, and some see the move as a direct effort to unseat Gov. Mike Pence over his handling of the controversial issue.

Oesterle, 49, co-founded the online consumer review company 20 years ago and has been its only chief executive. He hasn't been involved in state politics since he managed two-term Indiana Gov. Mitch Daniels' first election campaign in 2004.

His planned departure as Angie's CEO comes as the growing company faces a host of challenges, including competition from heavyweights Google and Amazon. Angie's recently outlined a $40 million expansion plan for its Near-Eastside campus that calls for hiring 1,000 new workers over the next few years.

That expansion, however, was put on hold earlier this month by Oesterle over the passage of the Religious Freedom Restoration Act. He said the act opens the door to discrimination against gays and lesbians and makes him inclined to expand in another state.

Oesterle remains one of the only prominent Central Indiana business leaders to express unhappiness over changes the legislature hastily made to state law to assuage RFRA critics. Oesterle says the changes don't go far enough to shield lesbian, gay, bisexual and transgender people from discrimination based on religious grounds.

Advocates of the original law hailed its passage, saying it would protect people with sincere religious beliefs from government laws and actions that infringe on their religious practices.

Pence, who backed RFRA and signed it into law, is up for re-election in 2016. Like Pence, Oesterle is a Republican, so their disagreement over RFRA signals an intraparty split on what's turning out to be a divisive social issue.

Indiana's public image "took a shellacking" after passage of RFRA spurred widespread criticism from gay rights groups, much of the business community and others, Oesterle said. "Indiana was under significant duress and went through a heartbreaking situation."

Oesterle's announcement amounts to "an announcement of trying to unseat a governor," said Andy Downs, director of the Mike Downs Center for Indiana Politics. "If you think about the individual positions that could have made a difference about this (RFRA), that's only one, that's the governor."

"That is somebody who is saying either he is running for governor or is looking for somebody to run for governor," Downs said of Oesterle.

Oesterle, a West Lafayette native and former trustee at Purdue University, said he hasn't decided whether he wants to run as a candidate or support someone else. In 2004, Oesterle took a leave from Angie's to manage Daniels' first campaign, which raised a record $18 million for an Indiana gubernatorial race and unseated a sitting governor, Democrat Joe Kernan.

Oesterle will stay on in the job at Angie's until his successor is hired. That could take months. He remains on Angie's board until his current term expires and will play a role in picking his successor.

He said he sprang the news about quitting as CEO at a specially called telephonic meeting of Angie's board of directors Monday.

He said he realized his position as CEO is incompatible with getting involved in politics. His 20th anniversary as Angie's CEO, he said, also put him in a reflective mood.

"You start to look around and see what you are going to do in your career," he said. "I can maybe do some things to help resolve some of the state's issues. I am going to take a little time and sort out what they might be."

Oesterle's replacement likely will be the one to decide whether the expansion plan will happen. The City-County Council has yet to approve the millions of dollars in subsidies it offered for the expansion, including building a parking garage.

Angie's Chairman John Chuang, a Boston investor who was a fellow graduate student with Oesterle at Harvard Business School, wouldn't discuss Oesterle's resignation.

In a statement, Chuang said, "I want to thank Bill for his leadership in helping to create one of the strongest brands in local home services. This transition period provides an opportunity to acknowledge and applaud Bill's contributions to the company, while also ensuring a smooth transition to our next chief executive officer."

Under Oesterle and co-founder Angie Hicks, Angie's has grown into a major Indianapolis employer, with about 1,800 local employees.

But Angie's has never posted an annual profit in its 20-year history and relies heavily on investor money to stay afloat. In 2011, it went public, selling stock on the New York Stock Exchange. Angie's board is peopled with investors who control a large amount of its stock.

Oesterle is stepping down at a time Angie's faces potentially its biggest competitive threat ever, with Internet giants Google and Amazon entering its business.

Amazon's new service, called Home Services, creates rankings of recommended contractors and lists upfront prices in major markets across the country.

Meanwhile, Google plans to announce later this spring a new product aimed at connecting Google search users with local home services providers, such as plumbers and electricians.

In a report to investors, analyst Rohit Kulkarni of RBC Capital Markets said, "We think the CEO departure doesn't imply any dramatic changes in the company's core strategy. We expect the company to stay the course."

Angie's stock has been on a steady slide since it hit an all-time high of $28 in July 2013. It closed Wednesday at $5.95 a share, up nearly 6 percent or 33 cents on the day.

Angie's also announced Wednesday that it raised its estimate of its 2015 cash flow by $2 million, to a range of $30 million to $32 million.

Oesterle owns 2 million Angie's shares, worth around $12 million. In 2013, he sold almost half a million of his shares for more than $10 million. His annual pay as CEO was last listed at $817,000.

Oesterle said his opinions on gay rights were formed in part from running a company that has hired gays and wants them to feel comfortable living and working in the state. His opinions also are personal, he said.

"I abhor discrimination, I just do," he said. "I certainly support religious freedom ... right up to the point that that discriminates against somebody else and actively does so."

Oesterle said he has donated money to Indiana Equality, a gay rights group.

Melyssa Hubbard, a self-professed dominatrix who works in sales at Angie's List, said the company hired her in 2006 despite knowing about her work in sexual bondage. She wrote a book, "Spanking City Hall," about her conflicts with the city.

"I wish every place on earth was like this," she said in a recent interview. "The employees come from various walks of life. That's important to Bill. I've always told him how grateful I am to be working here.

"We have the conservatives and the liberals and really buttoned-up people and people with pink hair and tattoos. Bill creates platforms for people to self-actualize."

Oesterle said he keeps an autographed copy of Hubbard's book in his office.

"She found a job here. It's kind of a safe place for her. She is not being judged," he said.

Oesterle's announcement comes as Pence's public approval seems to be suffering. A recent 500-person poll from the liberal Human Rights Campaign found Pence's job approval to be at 43 percent. A similar sized poll conducted by the Indiana Association of Realtors, taken shortly before the JustIN state-run news service controversy in January, found Pence's approval at 62 percent.

Any candidate running against Pence as a Republican would face major hurdles raising cash and rallying support among the base of conservative voters who turn out in Republican primaries.

Star reporter Tom LoBianco contributed to this story.

Call Star reporter Jeff Swiatek at (317) 444-6483. Follow him on Twitter: @JeffSwiatek.