Chief Executive magazine and Applied Finance Group have published their third annual ranking of CEO “wealth creators” and “wealth destroyers”.
In the former category, the list of top 5 performers includes Priceline.com CEO Jeff Boyd, Apple CEO Steve Jobs and Amazon.com CEO Jeff Bezos (see full list here).
What does that tell us, apart from the fact that it apparently helps being named Jeffrey?
The wealth creation index put together by Chief Executive and AFG attempts to identify those business leaders who have performed best in creating true economic value as measured by GAAP metrics – as opposed to mere accounting value. It leans heavily on the concept of economic margin (aka EM), measuring the degree to which a company makes money in excess of its risk-adjusted cost of capital.
The ranking focuses on the performance of companies (and their chief execs) in the S&P 500 index for the three years that ended on June 30, 2010. It’s based on reported results during that period and estimates for the next 12 months.
Here’s what makes Priceline, which entered the S&P 500 this year, stand out:
The company’s EM had been dragged down in earlier years, but was consistently high in more recent years. It has also had tremendous success in moving its U.S. business model to international markets, with non-U.S. revenue doubling last year to top U.S. revenue.
In addition, Priceline kept its operating costs in check, limiting them to 20 percent of year-on-year growth while pursuing an industry-leading growth in revenues of 27 percent. This allowed the firm to take market share from Expedia, another high scorer.
Less stellar performances in the technology/media space were logged by Computer Sciences’ Michael W. Laphen and Washington Post’s Donald E. Graham.
Steve Jobs was the co-founder and CEO of Apple and formerly Pixar. Steve Jobs was born in San Francisco, California to Joanne Simpson and a Syrian father. Paul and Clara Jobs of Mountain View, California then adopted him. In 1972, Jobs graduated from Homestead High School in Cupertino, California and enrolled in Reed College in Portland, Oregon. One semester later, he had dropped out, later taking up the study of philosophy and foreign cultures. Steve Jobs had a deep-seated interest in...
Jeffrey Preston Bezos, originally of Albuquerque, New Mexico, is the founder, president, chief executive officer and chairman of the board of Amazon.com. Bezos graduated from Princeton University Phi Beta Kappa. Prior to founding Amazon in 1994, he worked as a financial analyst for D. E. Shaw & Co. Time magazine named Bezos the Person of the Year in 1999.
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