Top 50 CEOs delivered average return of 93.5% over three year period
GREENWICH, Conn., Dec. 14, 2012 /PRNewswire/ – Chief Executive magazine has released its 5th annual Wealth Creation Index and CEO Lew Frankfurt of leather goods maker Coach topped all S&P 500 peers to take the top spot.
Among the best wealth creators were household company names like Philip Morris, Discover and T. Rowe Price. They were joined by lesser-known but exceptional performers including Fastenal, ONEOK, Cameron International and Alexion Pharmaceuticals. Bottom performers included included Citigroup, Archer Daniels Midland and Chesapeake Energy.
The ranking shows who has created the most value for shareholders from July 2009 through June 2012. S&P 500 CEOs who had been in their jobs for at least three years were eligible, excluding those who run REITs. For the full story, complete rankings and methodology, please visit ChiefExecutive.net/WealthCreators
TOP 10 CEO WEALTH CREATORS 2012
|2||Philip Morris||Louis C. Camilleri|
|3||Fastenal||Willard D. Oberton|
|4||ONEOK||John W. Gibson, Jr.|
|5||Cameron International||Jack B. Moore|
|6||Alexion Pharmaceuticals||Leonard Bell, M.D.|
|7||Discover||David W. Nelms|
|8||T. Rowe Price||James A.C. Kennedy|
|9||National Oilwell Varco||Pete Miller|
|10||W.W. Grainger||James T. Ryan|
Created in collaboration with Great Numbers! and the Applied Finance Group (AFG), the ranking is based on four factors:
- How good a company was at making real money (operating cash flow in excess of its risk-adjusted cost of capital).
- Its prospects for continuing to make real money.
- Its wise use of capital.
- How highly the market values the company's assets.
As validation of the ranking method, the authors calculated the 3-year average Total Shareholder Return (share-price return percentage plus dividends) for the top 50 companies. It was 93.5% (up from 68.5% in last year's ranking). This compares to the bottom 50 companies' average 3-year TSR of -21.1% (down from -9.3% last year). The S&P 500's average 3-year TSR was +50.8% this year, dramatically up from 19% last year.
Drew Morris, CEO of Great Numbers! and the article's lead author said, "In creating and publishing these rankings, we're trying to help companies realize their upside potential in two important ways: first, by increasing awareness of exactly how to manage for wealth creation and, second, by suggesting a measure—AFG's economic margin—that all companies can use for creating value."
"CEOs are hired to create wealth for their shareholders as well as value for their customers and employees," says J.P. Donlon, Chief Executive magazine's Editor-in-Chief. "Chief Executive created the Wealth Creators Index to measure just how well—or how poorly—some CEOs are performing their jobs."
About Chief Executive Group
Chief Executive Group elevates the effectiveness of CEOs and the enterprises they lead. The Group produces the award-winning Chief Executive magazine (published since 1977), website ChiefExecutive.net, and hosts exclusive events for CEOs to network, learn and share ideas with peers. The Group also publishes proprietary research which gives CEOs insights through data and trends that better help them lead their organizations.
About Great Numbers!
Great Numbers! helps executives uncover the most powerful upside elements available to their business and mold them into a prosperity design—a blueprint for delivering that upside.
About The Applied Finance Group
AFG is an independent equity research advisory firm specializing in performance and valuation measurement using Economic Margin, which they've pioneered.