Barrons CEOs 1 by ozhan

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Barrons top ceos
Warren Buffett - Berkshire Hathaway
Kenneth Chenault - American Express
George David - United Technologies
Chenault Lew - Coach
Frankfort Larry Fink - BlackRock
Charlie Ergen - EchoStar Communications

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									Warren Buffett
Berkshire Hathaway, CEO since ’65

Kenneth Chenault
American Express, CEO since ’01

George David
United Technologies, CEO since ’94.

Why: The era’s most extraordinary
investor and manager

Why: Driving platinum results at a
financial-services icon

Why: UT, not GE, is the top-performing conglomerate

ge isn’t slowing Buffett. At 76, he remains at the top of his game. His Berkshire Hathaway is coming off its best year ever as operating profits hit $9.3 billion Annualized Price Change in 2006, almost double 2005. One Year 22.3% In the past decade, Buffett has While CEO 23.3% turned Berkshire from an insurS&P 500 10.4% ance and investment company 2007 P/ E 19.8 5-Yr. Profit Growth 28.0% into a cash-spewing conglomerate with more than 70 operating (thou) $120 BRKA / NYSE businesses ranging from hamburgers (Dairy Queen) to private jets (NetJets) to electric and gas 100 utilities (MidAmerican Energy). Thankfully, Buffett issues minimal amounts of stock for his acquisi80 tions; nearly all the deals of re2005 2006 ’07 cent years were for cash. While publicly lukewarm on stocks, Buffett added to Berkshire's $60 billion equity portfolio in 2006, buying shares of Johnson & Johnson, ConocoPhillips and U.S. Bancorp. Berkshire’s own Class A shares have topped $100,000, up from $20 when Buffett took over in 1965. Buffett's shoes clearly will be hard to fill, but he may be around for a while yet: His actuarial life expectancy, as he wrote in his recent annual letter, is 12 more years. —Andrew Bary

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henault never leaves home without it—his managerial know-how, that is. Two years ago, for instance, he decided to spin off American Express’ insurAnnualized Price Change ance and investment unit as One Year 5.5% Ameriprise Financial to allow While CEO 3.7% AmEx to focus on its high-return S&P 500 2.8% charge-card business. The move 2007 P/ E 16.7 5-Yr. Profit Growth 13.0% paid off quickly: An independent Ameriprise has seen its shares $70 AXP / NYSE gain 60% and AmEx’s operating profits rose 18% last year as re60 turn on equity hit 34%, the highest figure among big financial 50 firms. Little wonder that Chenault’s 40 fan base includes Buffett: Berk2005 2006 ’07 shire Hathaway is AmEx’s biggest shareholder. Chenault now is doing all he can to expand the company’s franchise. He’s trying to lure younger consumers with the notion that American Express is “an aspirational brand.” And he’s going so far as to let its affluent cardholders use their plastic as down payments on luxury condos in Manhattan. Sound risky? AmEx has some of the lowest credit losses in the industry—no small matter in these jittery times. —A.B.

avid is the total package, combining Japanese efficiency techniques, shrewd bets on products and unusual attentiveness to soft, human values. Annualized Price Change It’s paid off in hard dollars. One Year 12.2% David has delivered double-digit While CEO 20.0% profit gains in quarter after quarS&P 500 11.3% 2007 P/ E 15.6 ter, year after year, in good times 5-Yr. Profit Growth 12.0% and bad. GE may be the most famous conglomerate, but under $70 UTX / NYSE David, United Technologies has taken its measure in both stock60 price performance and earnings growth. 50 United Technologies, best known for such brands as Otis ele40 vators, Carrier air conditioners, 2005 2006 ’07 Pratt & Whitney jet engines and Sikorsky helicopters, has been been absolutely humming under David’s guidance. Its employees have been getting smarter, too: David’s scholarship program pays all expenses for employees taking college or graduate-school courses. The tab in recent years: $600 million. David insists the company is set to achieve superior results long after his retirement, slated for next year. Not even Jack Welch was able to do that for GE. —Jonathan R. Laing

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Charlie Ergen
EchoStar Communications, since ’80

Larry Fink
BlackRock, CEO since ’88

Lew Frankfort
Coach, CEO since ’95

Why: A disciplined approach to growth put shares in orbit

Why: The smarts to assemble a world-class money manager rom zero to $1 trillion in 19 years. That’s the steep trajectory of BlackRock’s assets under management since the firm was founded in 1988 as a unit of inAnnualized Price Change vestment firm Blackstone One Year 12.1% Group. And for every day of its While CEO 39.7% existence, BlackRock’s CEO has S&P 500 2.9% been Laurence D. Fink, one of 2007 P/ E 21.7 5-Yr. Profit Growth 25.0% the sharpest minds in financial services. $200 BLK / NYSE Fink, a former mortgage-se150 curities trader at First Boston, has steered BlackRock toward 100 the top ranks of asset managers by instilling a performance50 driven culture and cutting deals 0 to fuel growth. 2005 2006 ’07 Fink saw early the value of growing within a larger institution, and then sensed the virtues of independence as a fiduciary before that became the standard view. He sold the firm to PNC Financial in 1995, bought a minority stake public in 1999 and then, last year, boldly combined the firm with Merrill Lynch Investment Management. Since the IPO, the shares have surged 35% a year. It’s enough to make an old mortgage jockey smile. —Michael Santoli

Why: Unparalleled grasp of a luxury brand

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harlie Ergen loves to defy the doubters. While many worry about the staying power of satellite TV in a time of intense competition from cable operators, EchoStar Communications added over Annualized Price Change One Year 38.2% a million net subscribers in 2006, While CEO 30.3% bringing its total to 13.1 million. S&P 500 10.3% That made the company No. 4 in 2007 P/ E 21.8 5-Yr. Profit Growth 85.0% pay TV—behind only Comcast, Time Warner Cable and DirecTV. $45 DISH / NNM Ergen has been beating the 40 odds ever since he launched his service 11 years ago. He’s done it 35 by offering lower prices than cable, serving rural areas and keep30 ing costs down. He talks little to 25 Wall Street and believes fiercely in 2005 2006 ’07 a strong balance sheet. If that sounds like an owner, there’s a reason: Ergen controls 240 million shares of EchoStar stock, a stake worth over $10 billion. In the past year, EchoStar shares have shot up 40%, thanks to strong results and takeover potential. The most likely buyer: AT&T, a current partner. Or EchoStar and arch rival DirecTV may try to hook up. With any luck, the stock will make like a satellite and head for the sky. —A.B.

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ew companies understand their brands as well as Coach, the handbag and accessories maker whose smart designs seem to glide off store shelves. That’s because few chief execu- Annualized Price Change One Year 32.1% tives know their customers’ prefWhile CEO 55.0% erences and aspirations better S&P 500 1.5% than Frankfort, who arrived at 2007 P/ E 24.6 5-Yr. Profit Growth 47.0% Coach in 1979 and is responsible for turning a staid old leather$50 COH / NYSE goods producer into an iconic purveyor of “affordable luxury.” 40 Frankfort recites the key markers of the Coach brand 30 without hesitation, from quality workmanship to a casual so20 phistication to the distinctive 2005 2006 ’07 hardware on the bags. Unlike many fashion houses, Coach researches its customers’ behavior and choices rather than dictating what’s “in.” Though Coach shares sold off sharply last year amid consumerslowdown fears, the financial results beat forecasts, with earnings up 38% for the year. No need to research the source of longterm investors’ brand satisfaction: The stock is up from a split-adjusted $2 in its late 2000 IPO to a recent 49. —M.S.

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