FOR IMMEDIATE RELEASE – GREENWICH, CT, November 17, 2015 – Now in its 8th year, Chief Executive magazine announced that Facebook CEO Mark Zuckerberg ranked No. 1 in the publication’s Wealth Creators Index.
MasterCard returns this year in second place from its No. 1 rank in 2014. It also represents economies of scale and a network effect. It helps to have a business model that has proven astonishingly successful in throwing off cash. The Purchase, NY payments firm depends on a strong technology network that addresses the increasing convergence of physical and digital worlds. Given that $8 out of $10 of world consumer transactions are still done in cash, MasterCard has a lot of headroom to expand its market.
Third-ranked O’Reilly Automotive also benefits from economies of scale and an extensive distribution network. Launched in 1957 as a retail auto parts distributor in Springfield, Missouri, it
has since expanded into 43 states with 4,433 employees. It boasts a robust supply chain and overshadows competitors, such as Pep Boys, in operational efficiencies.
Rounding out the top 5 wealth creators are Brian D. Jellison, CEO of Roper Industries, and Rodney C. Sacks, CEO of Monster Beverage, who came in fourth last year.
“Facebook’s rise clearly reflects the network effect,” said J.P. Donlon, editor in chief of Chief Executive magazine. “The company, which had its IPO in May of 2012, was first-to-scale in social media and benefited mightily from technological and commercial advances in mobile phones and mobile phone cameras. Facebook is the epitome of being in the right place at the right time.”
Review the entire 2015 Wealth Creators ranking online.
The Wealth Creators Index ranks the top 100 public companies of the S&P 500 where 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 (TSR) of 118.6 percent between July 2012 and June 2015 (the period covered in the reported financials). The bottom 50 companies’ TSR averaged 75.2 percent, while the actual for all of the scored S&P 500 companies was 85.8 percent. The top 50’s median TSR was 103.5 percent; the bottom 50’s was 61.4 percent.
The annual Wealth Creators Index also ranks the top 20 mid-market firms from the Russell 3000: Nigel Travis of Dunkin’ Brands Group is the top wealth creator of upper mid-market companies (revenue between $500 million and $1 billion), with a three-year total shareholder return of 67.8%. Rick Smith, CEO of aerospace and defense company Taser International, is the top wealth creator for lower mid-market tier companies (revenue between $100 million and $499 million), with a 535.7% 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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