Wells Fargo, CEO since ’98
Procter & Gamble, CEO since ’00
Tesco, CEO since ’97
Why: King of the cross-sell. n an industry with more than its share of ups and downs, Kovacevich has made Wells Fargo a paragon of predictability. The San Francisco-based banking giant has increased its earnings at an Annualized Price Change annualized 12% over the past five One Year 8.1% years and shows little sign of While CEO 10.6% S&P 500 4.7% slowing. 2007 P/ E 12.7 Kovacevich (pronounced Koe5-Yr. Profit Growth 12% VAH-suh-vich) shuns the big acquisitions fashionable among $40 WFC / NYSE other banks, preferring to grow organically. Nor is he keen on 35 massive share repurchases, opting instead to husband capital 30 for expansion. His main mantra is cross-sell25 ing. He wants to cement rela2005 2006 ’07 tionships with customers by offering multiple banking products—deposits, credit cards, home mortgages, auto loans. The average retail customer has over five products from Wells, far above the industry norm. True, Wells could get dinged in the subprime mortgage mess; it’s a big originator of the loans. But as Wells points out, it’s also a careful originator. Ultimately, the crisis may be a boon for Kovacevich, thinning out weak rivals. —A.B.
Why: Hasn’t let bigger get in the
way of better
Why: Best-of-breed grocer with global ambitions
afley says he’s a big believer in keeping one’s word, and he is doing just that as he approaches the second anniversary of his $57-billion merger of consumer products giants Procter & Gamble Annualized Price Change One Year 5.9% and Gillette. While CEO 15.3% Lafley, 59, has made good on S&P 500 1.2% a promise to trim $1 billion-plus 2007 P/ E 19.4 5-Yr. Profit Growth 10% annually from the new P&G. He has also presided over some big $70 PG / NYSE marketing splashes. With the in65 troduction of such winners as the Gillette Fusion razor and Tide 60 with Febreze “freshness,” P&G was responsible for five of 2006’s 55 top 10 new packaged goods for 50 consumers, in the view of market 2005 2006 ’07 researcher IRI. Such new products have helped the company post solid, organic sales growth of 5%-7%, despite the headwinds of higher commodity and and energy costs. Lafley is now pushing hard into Asia, Central and Eastern Europe and Africa. But for all his products and markets, his vision is strikingly simple: to be “one team with one dream.” For investors, whose holdings already have nearly doubled in Lafley’s tenure, it’s a sweet dream. —Robin Goldwyn Blumenthal
f there’s no greater flattery than the attentions of Warren Buffett, Tesco, the big British supermarket chain, had ample reason to blush earlier this year. The Oracle of Omaha revealed that his Annualized Price Change One Year 27.8% Berkshire Hathaway had acquired While CEO 17.6% a stake of nearly 3%. S&P 500 7.6% It’s easy to see why. CEO Terry 2007 P/ E 19 5-Yr. Profit Growth 13.7% Leahy has Tesco expanding its best-in-class operations around $30 TSCDY ADR / OTC the world. Unlike most retailers, it has not only managed to defend 20 itself against U.S. giant Wal-Mart on its home turf in the U.K., but 10 has thrived there. One of every three British pounds goes through 0 Tesco’s cash registers. Now, Leahy 2005 2006 ’07 is about to execute a long-planned invasion of Wal-Mart’s backyard, opening stores in Los Angeles, San Diego, Las Vegas and Phoenix. He’s also expanded into China and Turkey. Leahy always has taken Tesco’s founding credo to heart: “Pile it high and sell it cheap.” Profits, too, have piled up, helping investors reap returns of 400% over Leahy’s tenure. Investors’ smiles may soon be greeted by the frowns of U.S. grocery store owners. —V.J.R.
Whole Foods, CEO since ’80
Arcelor Mittal, CEO since ’76
Macquarie, CEO since ’93
Why: Capturing the growth potential in natural food
Why: Forging a global steel empire
Why: The venturesome spirit to
follow the open road
ackey likes his job so much that he decided earlier this year to eliminate virtually all of his compensation. For $1 a year, he’s adroitly guiding the pioneer Annualized Price Change of natural and organic grocery One Year -25.2% stores into a new era of growth While CEO 20.8% and competition. S&P 500 10.7% With everyone from Wal-Mart 2007 P/ E 31.7 5-Yr. Profit Growth 18% to Safeway muscling in on natural foods, Mackey is fighting back $90 WFMI / NNM by offering a “whole lifestyle”— 75 prepared gourmet meals, linens, music and food supplements. He 60 continues to expand the 190-store chain and has inked a smart deal 45 to buy smaller rival Wild Oats. 30 Wall Street has pounded the 2005 2006 ’07 stock by 25% over the past year, but don’t sell Mackey, 53, short. His insights allowed him to build the business he created in 1980. Not only was he early to natural foods but he was among the first to see the promise in “foodies,” those affluent, well-educated people who crave good eats. In giving up his pay, Mackey said Whole Foods already has given him more money than he ever dreamed of. With any luck, investors may soon be able to say the same. —R.G.B.
ant to know how India became a leading incubator of multinationals? Read the story of Lakshmi Mittal. The 56-yearold tycoon took over Arcelor last Annualized Price Change year for Œ26.9 billion ($35.8 bilOne Year 37.3% lion), creating the world’s largest While CEO 6.2% steel company and greatly exS&P 500 6.5% panding an empire he started in 2007 P/ E 6.1 the 1970s. 5-Yr. Profit Growth NM Mittal, long a producer of low$60 MT / NYSE cost steel, was an early advocate of industry consolidation and 45 bought downtrodden plants in 30 Mexico and Kazakhstan. Then, when the world began demand15 ing more steel, Mittal was off to 0 the races. 2005 2006 ’07 Today, he owns 44% of the Rotterdam-based company, which has annual sales of about $89 billion and produces 120 million tons of steel a year, or about 10% of global production. With a personal fortune estimated at $32 billion—Arcelor Mittal, after all, is busy returning cash to shareholders by paying out a big dividend and repurchasing shares—Mittal is now investing in Indian refineries and scouting for energy assets overseas. —L.P.N.
o one will begrudge Moss if he becomes Australia’s bestpaid executive in 2007. For the year ending March, his firm, Australia’s biggest investment bank, is set to post its 15th consecutive Annualized Price Change One Year 23.0% year of profit—A$1.3 billion, up While CEO 26.2% more than 50% from last year. S&P 500 7.7% Under the 14-year reign of the 2007 P/ E 15.1 5-Yr. Profit Growth 23.5% mild-mannered banker, Macquarie has snatched up tollroads, airports, $A100 MBL / Australia and trophy properties around the 80 world, on the theory—correct, as it turned out— that steady-return in60 frastructure investments will meld perfectly with pension funds’ long40 dated obligations. 20 Macquarie, which controls the 2005 2006 ’07 Indiana Tollroad and the Chicago Skyway, is said to be eyeing the New Jersey Turnpike as well as a range of other assets. It’s at the forefront of a trend that saw some $150 billion of infrastructure assets change hands last year. That activity can be intensely lucrative: When Macquarie advises a privatization, it can provide financing to a buyer or perhaps lease the asset itself. Running a tollbooth has never been so much fun. —L.P.N.