This week, Barron’s published its annual list of the 30 best CEOs of public corporations from around the world. It is a diverse list in terms of age and type of business. To be eligible, each CEO had to be in their position at least five years, although several have been in their job for over thirty years.
Here are some nuggets of wisdom from the summaries that the magazine wrote about each CEO:
- Jeffrey Bezos, Amazon – He has built an e-commerce giant that has changed the way we shop. His Amazon Prime initiative was criticized but now boasts 50 million subscribers who pay $99 per year for two-day shipping and video streaming. He has launched Amazon Web Services which provides cloud computing for large and small companies. His gift is leading an innovative team that delivers products and services in an intuitive and customer-friendly manner.
- Charles Brito, Anheuser-Busch InBev – He turned a small Brazilian brewer into the largest beer company in the world through seven major acquisitions. In the last ten years, he bought the two largest brewers in the US. In the last six years, his company achieved the best return for shareholders of any global consumer products company. He is the leader of the Brazilian management style which focuses on strict cost controls. He has impacted St. Louis by taking a brewery that was run like a country club and turning it into a productive and highly profitable entity.
- Warren Buffet, Berkshire Hathaway – He is the most famous and probably the most successful investor/CEO of my lifetime. He has run his company for 51 years. His stock has had an annual return during that time of 20% versus a 10% return on the SP 500. He finds strong companies that are leaders in their industries and buys them only when they are available at a price that equates to a significant discount to their intrinsic value. His lesson is that you should never overpay for an asset, and his results show that his patience has been rewarded.
- David Cote, Honeywell – He has taken an old-line industrial giant and remade it into a company focused on technology. Half of his engineers now are software engineers. He and his team have built the Internet of Things. Honeywell’s software will allow devices of all types to talk to each other using the cloud for communications. He and Honeywell continue to focus on how to make technology solve practical problems for traditional companies.
- Thomas Enders, Airbus – He remade Airbus from a quasi-government entity constrained by European governments into a competitive international company. Order backlog has surged 75% and stands at more than 6,800 jets, worth one trillion euros, up from 567 billion euros at the end of 2012. He has demonstrated how to take a company shackled by bureaucratic government involvement to a dominant corporate entity. In doing this, he has once again demonstrated that free enterprise is far superior to socialism. His message: eliminate obstacles to growth.
- Jeffrey Ettinger, Hormel Foods – He has taken the maker of Spam and diversified into high margin prepared foods, Mexican foods, and organic meats. He and his team researched what kinds of products they were missing and also wanted to become more global. Additionally, they sought to bring multi-cultural products and healthier products to the marketplace. The result has been a 20% annual investor return in the last ten years. His lesson is that we need to look beyond what we know to what we could do to take advantage of current trends.
- Reed Hastings, Netflix – He has led the evolution from “tune in” to personal choice. He has delivered content with a model that is convenient to the consumer and one which allows the consumer to have more choices. The choices Netflix offers can be accessed conveniently without going out to rent a video or waiting for a scheduled time on cable TV. He continues to broaden the offerings that Netflix provides. His strategy is to continue to provide consumers with a variety of convenient choices that are available when they want to use them.
- Alan Joyce, Qantas Airways – He is the master of playing hardball. In 2011, he grounded his entire fleet to reign in unions and cut costs. In doing so, he transformed Qantas from a non-competitive airline that was accommodating the needs of employees but not customers to a leader in the Far Eastern markets it serves. His aggressive action was risky, but he knew that he must act radically or watch his company die a slow death.
- Li Ka-shing, Hutchison Holdings – He has led his company since 1979. Li is Asia’s richest man. He re-structured his companies in 2015 to separate out the real estate holdings due to fears about the peak in real estate prices in China. This foresight has rewarded him and Hutchison Holdings which owns his operating companies. Li lives a modest lifestyle and is committed to philanthropy. He has done quite well for a high school dropout.
- Anand Mahindra, Mahindra & Mahindra – He prospered after India opened their markets to international competition in the 1990s. He compares his management style to that of a conductor who finds talented musicians and helps them harmonize. He is also willing to bet on new ideas and give the inventor time to make the idea work.
- Larry Merlo, CVS Health – He has focused on ways to make the various divisions of CVS work together. He has pushed the synergy of the different divisions, allowing CVS to serve its customers in a variety of ways. He eliminated the sale of tobacco products because it was incompatible with a health company. He is committed to a clear vision of what CVS should be and leads his team to deliver that vision by working together.
- Larry Page, Alphabet (aka Google) – He is the brilliant mind behind the various technologies in which Alphabet is involved. He hired a CFO who is comfortable in the spotlight so he could continue to remain in the background. Some refer to him as the Warren Buffet of technology. He prefers the shadows as he continually vets new technologies. His company is working on robots and connected cars that may not need drivers on the highway. He spent $3.6 billion on R&D projects last year that did not work. He is a true innovator with incredible vision and the resources and commitment to invest in them to find out if they will work.
- Howard Schultz, Starbucks – I admired his genius the first time I paid $4.00 for a coffee drink and liked it. Beyond remaking the coffee world and making the coffee shop mainstream, he has run his company in a unique way while remaining highly profitable. Since 1985, his stock is up an average of 25% per year while the SP 500 has been up 9%. This profitability has been achieved while providing “a balance between profitability and social impact.” Starbucks offers employees generous health benefits and college tuition. They focus on hiring veterans and out of work young adults. He has built a team of loyal employees and a brand with a high level of trust.
- Mark Zuckerberg, Facebook – “Zuckerberg faces adversity with the confidence of someone who knows his mission will succeed.” This statement from Barron’s typifies his attitude, whether at stockholder meetings when criticized by skeptics or when confronted by regulators who want to constrain Facebook’s growth. He describes his company as an organization that does not give up when it hits a roadblock. Clearly the organization reflects his leadership.