The top 50 CEOs delivered an average total shareholder return of 73.3% since June 2007, according to a new study published by Chief Executive magazine and calculated by Applied Finance Group. That performance handily beats the 14.9% average of the S&P 500 during the same period.
Priceline CEO Jeff Boyd took the spot as the #1 value creator based on the success he has had in taking his company’s online travel services to international markets, expanding market share and growing the top line – while keeping tight controls on costs.
Other stellar wealth creators include Amazon CEO Jeffrey Bezos and Douglas Baker of Ecolab, both of whom return to the top 10 from last year, showing that strong execution skills translate into wealth-creating staying power.
Top 10 Wealth Creators:
“The past 12 months have not been an easy time to grow – or for companies that already had high levels of ‘Economic Margin,’ which is profit in excess of their risk-adjusted cost of capital,” says Drew Morris in the press release. Morris is CEO of Great Numbers! who contributed to the study. Morris continued, “The more profitable a company is, the more difficult it is to maintain high levels of profitability when competitors step up and target market leaders.”
Similarly, the regulatory environment can make it difficult for companies to maneuver. Both financial and healthcare companies have become the worst-performing sectors over the last 12 months, leading even well-managed organizations to struggle to maintain past success. MasterCard, which led the rankings last year, for example, slipped to No. 24 – a still-respectable score. Federated Investors, however, has consistently stayed in the top three since the value creation index was conceived three years ago.
David Yost of Amerisource Bergen, Theodore Solso of Cummins, Gregory Johnson of Franklin Resources, Mark Templeton of Citrix Systems, Chris Begley of Hospira and James Rohr of PNC Financial were among the leaders who advanced at least 100 positions in rank since 2009.
The CEO Wealth Creation Index also lists the top wealth destroyers. The leaders of this dubious distinction include:
• Gregg Engles, CEO, Dean Foods
• Thomas Ryan, CEO, CVS Caremark
• Irene Rosenfeld, CEO, Kraft Foods
• Paul Evanson, CEO, Allegheny Energy
• Myron Ullman, III, CEO, J.C. Penney
Other value destroyers include the CEOs of Computer Sciences, Dow Chemical and the Washington Post.
“While some of the value destroyers were in the wrong industries at the wrong time, these CEOs tended to compound their companies’ problems by making expensive acquisitions or buybacks at the wrong time, as well as other strategic blunders,” noted Chief Executive Editor in Chief J.P. Donlon in the press release.
The CEO Wealth Creation examined S&P 500 CEOs who had been in their jobs for at least three years in order to get a fair appraisal of CEO actions under varying conditions. REITs were excluded. For the full story, complete rankings and methodology, please visit ChiefExecutive.net/WealthCreators.
Chief Executive Group elevates the effectiveness of CEOs and the enterprises they lead. The Group produces Chief Executive magazine (published since 1977), ChiefExecutive.net, and conferences and roundtables. The Group also produces the annual “Chief Executive of the Year” award dinner with NYSE Euronext at the New York Stock Exchange.
Source: Chief Executive Group
Surprisingly, Steve Ballmer at Microsoft came in #73 – out of a list of 338 CEOs. (The mentioned “wealth destroyers” are those at the bottom of the list.)
May he remain Microsoft CEO forever!
Full list
I should add that Ballmer did drop 65 places in the past year, from #8 for 2009 to #73 for 2010.
May he remain Microsoft CEO forever!
When was the last time Steve got some compensation (like stock options, an airplane etc) for his good work? Does not SJ get something extra every now and then besides his 1 dollar salary?
Would be about friggin time the board awarded him mucho dinero in some way…
Wait a second, wealth is created? I thought rich people only got rich by “stealing” wealth from everyone else?
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This is just shareholder value, not true value as determined by profitability. Otherwise, Amazon wouldn’t be there. Also, note that Devry is on the list, which is an education scam, like Kaplan and Phoenix. It’s little different than sub-prime mortgages for education.
such a limited view of wealth creation … Just look at all the wealt created by and from the iOS ecosystem — apps for iPad, iPhone, iPod. That’s how I’d look at wealth creation. Add that to increased shareholder valuation and now you’re talking real money.