Chief Executive’s 2014 Wealth Creators Index: MasterCard CEO Ajay Banga Tops the List

The result has been a 47.4 percent total annual average return to shareholders over the last five years. In addition, the company lured international customers with a mobile payment network, MasterPass, that lets people purchase with a simple click. At the mall, for example, MasterPass lets users tap a device at a cash register or scan a digital barcode. When online, customers can load any credit card—even if it’s not a MasterCard—onto a digital wallet. The company is developing a platform giving people the ability to pay for items while they wait in line or browse in stores.

Observing that 85 percent of the world’s transactions are still in currency, Banga has declared a “war on cash” to nudge as many consumers as possible toward electronic payments, preferably processed by MasterCard. Although competition to handle payments is intense in the U.S., the wider battlegrounds are in countries like India and Brazil, which have vast numbers of people without bank accounts, and a growing middle class.

IT and financial services, food & beverage, food retailing and healthcare service providers are all well represented in this year’s rankings. In addition to MasterCard, firms such as Fastenal, Monsanto, Discovery Communications, Precision Castparts and for-profit educator DeVry have all been consistent performers ranking among the top 100 wealth creators since the WCI’s inception in 2008.

Not all of these companies use EVA specifically but they clearly manage assets in highly efficient ways. After all, the essence of EVA is sales less operating costs less the full costs of financing business assets—as if the assets had been rented. It consolidates income efficiency and asset management into one net profit score. To sum up, regardless of the method used, companies that consistently make our list practice three managerial precepts:

  1. Operate efficiently by cutting wasteful costs;
  2. Grow profitably by investing and building the business while covering the cost of invested capital
  3. Purge ruthlessly by abandoning uneconomic activities that can’t cover the cost of capital.