Banga generated the highest economic value added of S&P 500 companies with CEOs in place 3+ years
GREENWICH, Conn., Oct. 29, 2014 /PRNewswire/ — Chief Executive magazine announced that MasterCard CEO Ajay Banga ranked No. 1 in the publication's Wealth Creators Index. Banga earned the recognition by generating the highest economic value added—or EVA—for his firm. As a result, he was responsible for generating a 47.4% total annual average return to shareholders per year over the last five years.
Since assuming the CEO role in 2010, "Banga has set a vision and defined a culture that shifted the company away from its historical focus on issuing banks and strengthened the company by growing the core business, diversifying across geographies and customers and building new businesses," said J.P. Donlon, editor in chief of Chief Executive.
Rounding out the top 5 wealth creators are Neal Patterson, CEO of Cerner, David L. Starling, CEO of Kansas City Southern, Rodney C. Sacks, CEO of Monster Beverage and Paul C. Varga, CEO of Brown-Forman.
Top 10 Wealth Creators, S&P 500
|
Rank |
Company |
CEO |
|
1 |
Mastercard |
Ajay Banga |
|
2 |
Cerner |
Neal Patterson |
|
3 |
Kansas City Southern |
David L. Starling |
|
4 |
Monster Beverage |
Rodney C. Sacks |
|
5 |
Brown-Forman |
Paul C. Varga |
|
6 |
Monsanto |
Hugh Grant |
|
7 |
T. Rowe Price |
James A. C. Kennedy |
|
8 |
Fastenal |
Willard D. Oberton |
|
9 |
Harley-Davidson |
James L. Ziemer |
|
10 |
Whole Foods Market |
John P. Mackey |
Review the entire 2014 Top 100 Wealth Creators ranking online.
Now in its 7th year, the Wealth Creators Index ranks the companies in the S&P 500 in which the CEO has been in place for at least three years. CEO performance was assessed using four measures based on economic value added—EVA momentum, EVA margin, market-implied momentum and MVA margin. Bennett Stewart, CEO of EVA Dimensions, and Drew Morris, CEO of Great Numbers!, conducted the data analysis.
The top 50 companies in the ranking delivered an average total shareholder return of 86.2% between July 2011 and June 2014, compared to the actual TSR of the scored S&P 500 of 68.9%. "The top-50 companies in the wealth-creation ranking also far outperformed the bottom-50 companies (average TSR 37.5%) during the three-year period," Stewart and Morris reported.
The annual Wealth Creators Index also ranks the top 40 mid-market firms from the Russell 3000: Steven R. Rowley of construction company Eagle Materials was the top wealth creator of upper mid-market companies (revenue between $500 million and $1 billion), with a three-year total shareholder return of 52%. Patrick W. Smith, CEO of aerospace and defense company Taser International was the top wealth creator for lower mid-market tier companies (revenue between $100 million and $499 million), with a 45% TSR.
"The companies that consistently make our list practice three managerial precepts," Donlon explained. "They operate efficiently by cutting wasteful costs; they grow profitably by investing and building the business while covering the cost of invested capital; and they purge ruthlessly by abandoning uneconomic activities that can't cover the cost of capital."
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Contact:
J.P. Donlon
Editor in Chief
Chief Executive magazine
Email
203-930-2704