The Top Wealth-Creating CEOs of 2010
Investors looking for business leaders who have successfully steered their firms through the current economic hard times may want to pay closer attention to Chief Executive magazine's CEO Wealth Creation Index, which ranks the top 50 CEOs on their ability to produce a higher level of true economic value for shareholders.
Priceline (PCLN) CEO Jeff Boyd topped this year's list. That honor is primarily due to his success in expanding the company's online travel business into international markets -- while keeping a lid on operating costs and stealing market share from competitors like Expedia.com (EXPE).
But the Wealth Creation Index doesn't just reward companies for increasing share price through accounting measures or cost cutting. It also focuses on a concept called "economic margin," which measures a company's ability to make money in excess of its risk-adjusted cost of capital. Companies on the list were evaluated on their three-year performance, from June 2007 to June 2010, so the CEO's leadership could be appraised over varying conditions.
The Good, Bad and Wealth-Destroying
Odds are good that a company able create wealth during the worst economic crisis since the Great Depression can also accelerate its money-making powers once the economy again picks up steam. With that in mind, the Chief Executive list might be a good place for investors to find companies with the potential for sustainable growth in the future.
CEOs on the Top 50 Wealth Creators list delivered an average total shareholder return of 73.3% since June 2007. By contrast, companies in the S&P 500 delivered total shareholder returns of 14.9% over the same period.
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In addition to Priceline's Boyd, the top 10 CEOs who created wealth for their shareholders are Dan Amos of AFLAC (AFL), J. Christopher Donahue of Federated Investors (FII), Steve Jobs of Apple (AAPL), Jeffrey Bezos of Amazon (AMZN), Ian Cook of Colgate-Polmolive (CL), Douglas Baker Jr. of Ecolab (ECL), Daniel Hamburger of DeVry (DV), Willard Oberton of Fastenal (FAST) and John Wiehoff of C.H. Robinson Worldwide (CHRW).
Chief Executive also lists the top wealth-destroying CEOs. Among those with this dubious honor are Gregg Engles of Dean Foods (DF), Thomas Ryan of CVS Caremark (CVS), Irene Rosenfeld of Kraft Foods (KFT), Paul Evanson of Allegheny Energy (AYE) and Myron Ullman, III of J.C. Penney (JCP).
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