While many companies hunkered down during the recession and financial crisis of 2008 and 2009, others went on the offensive -- and scored big. So as we drew up our annual list of the 30 most respected CEOs, we sought to identify executives who kept their companies out of trouble and took advantage of the downturn to expand, make shrewd acquisitions or feast on the problems of competitors.
The roster includes 11 new names, including Larry Ellison of Oracle (ORCL, news, msgs), Alan Mulally of Ford Motor (F, news, msgs), Reed Hastings of Netflix (NFLX, news, msgs), Tim Solso of Cummins (CMI, news, msgs) and Gordon Nixon of Royal Bank of Canada (RY, news, msgs).
Ellison is one of the most dynamic and controversial executives in technology, not to mention an accomplished yachtsman who brought the America's Cup back home earlier this year from the reigning champs in New Zealand. He has shattered the idea that tech mergers don't work, pursuing a successful strategy of buying and rolling up companies like PeopleSoft and Siebel Systems to create a software behemoth. Oracle is now digesting Sun Microsystems, one of its largest deals yet.
Ford's smart moves under Mulally's leadership enabled the automaker to be the only member of the Detroit's Big Three to avoid bankruptcy. The former Boeing (BA, news, msgs) leader cut through an infamous bureaucracy, promoted accountability and focused on the company's best asset: the Ford brand. Ford now is a Wall Street favorite, with its stock price up fivefold in the past year.
| CEO | Company | Comment |
|---|---|---|
| Bart Becht | Reckitt Benckiser (RGBY) | Built Europe's version of P&G |
| Larry Ellison | Oracle (ORCL) | Proved tech mergers can work |
| Reed Hastings | Netflix (NFLX) | Forged DVD powerhouse |
| Patrick Kron | Alstom (ALSMY) | Revived French conglomerate |
| Alan Mulally | Ford (F) | Put automaker on road to recovery |
| Gordon Nixon | Royal Bank of Canada (RY) | Kept the bank thriving |
| Mark Papa | EOG Resources (EOG) | Created fast-growing oil and gas company |
| Bruce Rockowitz | Li & Fung (LFUGF) | Expanded the Hong Kong trading company |
| Peter Sands | Standard Chartered (SCBFF) | Solidified bank's strength in Asia |
| Tim Solso | Cummins (CMI) | Turned around the maker of diesel engines |
| Chuan-fu Wang | BYD (BYDDY) | Built one of China's hottest companies |
Though not an obvious member of our elite group, Hastings qualifies because he has consistently defied doubters -- and short-sellers -- to position Netflix as the leader in the DVD rental business and video downloads, while once-formidable rivals such as Blockbuster (BBI, news, msgs) lie in ruins.
The little-known Solso has turned an underperforming company into a model of industrial competitiveness; Cummins now is the world leader in diesel-engine technology.
Nixon doesn't get as much attention as prominent U.S. bankers, but he kept Canada's largest bank profitable throughout the downturn, and Royal Bank now has something Jamie Dimon covets: a lofty price-to-book ratio of nearly 3, against just 1 for JPMorgan Chase (JPM, news, msgs).
In all, our list includes a dozen CEOs from outside the United States.
Not surprisingly, the stocks of most of the these companies have beaten the market during the CEOs' tenures, and the 30 stocks were up an average of 91% in the 12 months ended March 19, well ahead of the 51% gain in the Standard & Poor's 500 Index ($INX).
Probably the world's most valuable CEO is Steve Jobs of Apple (AAPL, news, msgs), as shown by stock dips on news of his medical problems. Apple recently hit a record, with a market value topping $200 billion, a reflection of the Street's confidence that a healthy Jobs (at least from what we can tell) continues to keep Apple ahead of the game. Jobs likely accounts for $25 billion or more of Apple's market value.
Among the best CEOs are founders who bring an entrepreneurial energy deep into their careers. Warren Buffett, at 79, is the ultimate founder-CEO. His Berkshire Hathaway (BRK.A, news, msgs) is his baby, and he cares for it with a parent's devotion. Thanks to Buffett's guts and financial smarts, Berkshire capitalized on the financial crisis at least as well as any large company, making more than $20 billion in lucrative investments, such as preferred shares in Goldman Sachs (GS, news, msgs), General Electric (GE, news, msgs) and insurer Swiss Re (SWCEY, news, msgs).
The little stuff about Buffett is telling. He recently mentioned that he plowed through American International Group's (AIG, news, msgs) 500-page 10-K report for 2009 on a Friday night. That kind of homework has helped Berkshire's market value go from $20 million to $200 billion in Buffett's 45-year tenure.
| CEO | Company | CEO | Company |
|---|---|---|---|
| Jeffrey Bezos | Amazon.com (AMZN) | Huateng Ma | Tencent (TCEHY) |
| Warren Buffett | Berkshire Hathaway (BRK.A) | Fujio Mitarai | Canon (CAJ) |
| John Chambers | Cisco Systems (CSCO) | Michael O'Leary | Ryanair (RYAAY) |
| Jamie Dimon | JPMorgan Chase (JPM) | Samuel Palmisano | IBM (IBM) |
| Larry Fink | BlackRock (BLK) | James Sinegal | Costco (COST) |
| Jose Sergio Gabrielli | Petrobras (PBR) | James Skinner | McDonald's (MCD) |
| Mark Hurd | Hewlett-Packard (HPQ) | Fred Smith | FedEx (FDX) |
| Steve Jobs | Apple (AAPL) | Rex Tillerson | Exxon Mobil (XOM) |
| Balsillie/Lazaridis | Research In Motion (RIMM) | Miles White | Abbott Labs (ABT) |
| Terrence Leahy | Tesco (TESO) |
While Buffett prefers to stay in Omaha and have the world come to him, Costco Wholesale (COST, news, msgs) CEO Jim Sinegal, at 74, maintains a punishing travel schedule that takes him to most of the warehouse chain's 566 stores each year. "There are no annuities in retailing," Sinegal says, adding that there also is no substitute for seeing stores and talking to managers and other employees face to face.
Other valuable executives are consummate managers, including Mark Hurd of Hewlett-Packard (HPQ, news, msgs), John Chambers of Cisco Systems (CSCO, news, msgs), and Rex Tillerson of Exxon Mobil (XOM, news, msgs). Hurd put HP back on track after Carly Fiorina'srocky tenure, while Chambers keeps Cisco ahead of the pack as the dominant networking equipment company. Under Tillerson, Exxon has remained one of the world's best-managed big companies in any industry.
Buffett says risk control is so critical for a large financial company that it should be the CEO's job to personally monitor it. JPMorgan's Dimon has the same philosophy, and it has helped the bank avoid the worst of the financial mess. Strong leadership was lacking in many of the financial companies battered by the crisis, including American International Group, Bear Stearns and Citigroup (C, news, msgs).
JPMorgan is clearly playing offense while rival Citigroup continues to regroup. For example, JPMorgan is targeting American Express' (AXP, news, msgs)affluent customer base with its Sapphire Visa cards.
| CEO | Company | Comment |
|---|---|---|
| Chase Carey | DirecTV (DTV) | Left to be No. 2 at News Corp. |
| Hugh Grant | Monsanto (MON) | Hampered by weak pesticide market |
| Satoru Iwata | Nintendo (NTDOY) | Wii console losing momentum |
| Alan Lafley | Procter & Gamble (PG) | Retired after 32 years at the company |
| Howard Levine | Family Dollar Stores (FDO) | Stock has lagged in recovery |
| Arthur Levinson | Genentech (RHHVF) | Now chairman after purchase by Roche |
| Jean-Bernard Levy | Vivendi (VIVEF) | Stock has lagged in recovery |
| Lakshmi Mittal | ArcelorMittal (MT) | Took on too much debt to do deals |
| Franck Riboud | Danone (DANOY) | Growth has slowed, returns have fallen |
| James Schiro | Zurich Financial (ZFSVY) | Retired |
| Rick Tsai | Taiwan Semiconductor (TSM) | Chip maker shifted him out of job |
When we began this list in 2005, the little-known Larry Fink of BlackRock (BLK, news, msgs) made the cut because we felt he was one of the smartest and most capable executives in the financial industry. Fink has rewarded our confidence, building BlackRock into one of the largest asset managers in the world. Fink is also the go-to guy for Washington policymakers seeking advice on dealing with Wall Street -- thanks to his independent streak and understanding of the markets.
Another good pick: Bob Simpson, the founder and former CEO of XTO Energy (XTO, news, msgs), one of the most successful independent energy companies. Simpson capped his career by agreeing to sell XTO to Exxon for $41 billion in late 2009. Like Fink, he has been another multiyear member of our list.
We have made mistakes over the years. We're embarrassed that Fred Goodwin, the former CEO of Royal Bank of Scotland (RBS, news, msgs), made our list in the past; his overextended bank had to be rescued by the British government. For several years, we were impressed by Lehman Brothers' Dick Fuld, not recognizing that the downside of his steely and seemingly successful leadership was an authoritarian corporate culture where risk control went awry.
This article was reported by Andrew Bary for Barron's.
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