Most Valuable CEOs Ranked: 4 CEOs Beat Steve Jobs in Creating Value Among S&P 500

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For the past four years The Applied Finance Group has used our Economic Margin methodology to evaluate the best and worst wealth creating CEO's in the S&P500.  The companies that hit the top of this list are considered "best of class."  However, it is also important to consider the expectations that are priced into each of these companies and their overall valuation attractiveness which are not part of this analysis.  

Apple Inc.'s visionary CEO Steve Jobs created extraordinary value for shareholders-but four lesser-known CEOs were even more valuable over the past three years.

Express Scripts CEO George Paz earned the title of Most Valuable CEO, followed by Exelon CEO John W. Rowe.  Priceline.com CEO Jeffery H. Boyd was #3, Varian Medical Systems CEO Timothy E. Guertin was #4 and Apple CEO Steve Jobs ranked #5.

This is the fourth year Chief Executive magazine and ChiefExecutive.net have published its Wealth Creation Index, ranking the performance of S&P 500 CEOs.  Created in collaboration with Great Numbers! and the Applied Finance Group, the ranking is based on four factors: (1) How good a company was at making real money (operating cash flow in excess of its risk-adjusted cost of capital), (2) Its prospects for continuing to make real money, (3) Its wise use of capital, and (4) How highly the market values the company's assets.

The top 50 companies in ChiefExecutive.net's ranking produced an average total shareholder return of 68.4% in the three years ended June 30, 2011.  The bottom 50 averaged -9.3%.

CEOs that had been in their roles for less than 3 years and the S&P 500's 13 REITs were not eligible, resulting in a pool of 366 chief executives (compared to 2010's 343). The ranking covered reported returns from July 2008 through June 2011.

"In creating and publishing these rankings, we're trying to help companies realize their upside potential by increasing awareness of exactly how to manage for wealth creation, and by suggesting a valid measure that can be used at all levels of an organization," said Drew Morris, CEO of Great Numbers! and the article's lead author.  "Our method also lays out opportunities to improve a company's operating cash flow."

Morris noted that, "We've created a way for the S&P 500 companies' senior-management teams to look at the reality of their performance through the same lens professional investors use and to use the insights gained to create more shareholder wealth going forward."

"CEOs are hired to create wealth for their shareholders and value for their customers and employers," says J.P. Donlon, Chief Executive magazine's Editor in Chief. "Chief Executive created the Wealth Creators Index to measure just how well some are good at this task. In a real sense it measures just how good --or how poorly--some CEOs are performing their job."

The companies/CEO’s listed below all rank in the top 10 amongst all of the CEO's within the S&P 500 for their ability to create wealth for their shareholders.

Follow the links below to view the rankings in their entirety as well as commentary about the best and worst CEO's.

Click here to see the entire rankings.

Click here to see a slideshow of the Top 10 Most Valuable CEOs
Click here to read Editor-in-Chief JP Donlon's editor's note about this year's top CEOs
Click here to read about the methodology behind the list
Click here to see the Best and the Worst and How to Improve Your Ranking

 To get more information on the methodology used to understand CEO Wealth Creation, email us at info@valueexpectations.com.