James Schiro
Zurich Financial, CEO since ’02
Bob Simpson
XTO Energy, CEO since ’86
James Sinegal
Costco Wholesale, CEO since ’88
Why: Repairing a Swiss miss
Why: Hitting a gusher of his own n the past year, Simpson has solidified his company’s position as the country’s best-managed independent oil and gas producer. XTO’s proven reserves grew 12% in 2006 to the equivaAnnualized Price Change lent of 1.4 billion barrels of oil One Year 28.2% and its finding costs were half the While CEO 30.9% industry average. S&P 500 10.7% Simpson does it his own way. 2007 P/ E 11.2 5-Yr. Profit Growth 59.0% In an industry populated by oilmen with Texas-size egos, he is a $60 deliberate, former accountant. He XTO / NYSE focuses his drilling in the suppos45 edly mature continental U.S., leaving risky projects in the Gulf of 30 Mexico and abroad to competitors seeking elusive, giant fields. 15 Says he: “Oil and gas is best 2005 2006 ’07 found where the best oil and gas has already been found.” The investment community is warming to all this. The stock is up 28% in the past 12 months, beating the shares of Devon Energy, Apache, Anadarko and others. Though XTO probably would fetch a nice price in a takeover, shareholders are in no hurry to see a sale because the 58-year-old Simpson continues to build value. XTO’s stock is up nearly 50-fold since XTO went public in 1993, to a market value of $20 billion. —A.B.
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all him the Transformer. In mid-2002, James J. Schiro took charge of big Zurich Financial Services during the market equivalent of a category-five hurricane. Shares of Europe’s insurers were Annualized Price Change at multi-year lows in the wake of One Year 12.6% the Sept. 11, 2001, terrorist atWhile CEO 6.3% tacks. In addition, low interest S&P 500 7.9% rates and plunging stock prices 2007 P/ E 12.0 5-Yr. Profit Growth NM were taking a big toll on insurers’ investment income. CHF400 ZURN / SWISS Schiro moved decisively and dramatically. He refocused on 300 core markets and products, dropping businesses that weren’t 200 meeting hurdle rates. He also repaired a sagging corporate bal100 ance sheet, instilled financial disci2005 2006 ’07 pline, centralized processes and boosted profitability. In fact, the U.S.-born CEO’s efforts took the company from a loss of $3.4 billion to a profit of $4.5 billion last year. The stock has returned some 280% since the lows of 2003. With operations in Europe and North America, Schiro’s Zurich is now pushing into new regions like Russia and launching products like pay-as-you drive insurance. The travels are sure to be rewarding. —V.J.R.
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Why: Low prices, high profits and happy workers
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inegal has demonstrated that good treatment of customers and employees is good for shareholders. The 26 million consumers who shop at his discount Annualized Price Change chain know they will always find One Year 9.2% bargains—no product is marked While CEO 15.0% S&P 500 10.7% up more than 15% above cost. 2007 P/ E 21.1 And Costco’s 93,000 domestic 5-Yr. Profit Growth 12.0% employees know they’ll get generous pay and health benefits com$60 COST / NNM pared with their counterparts at 54 Wal-Mart. Costco picks up 90% of the health tab. 48 The twin focus on shoppers 42 and workers is pure Sinegal. He co-founded the company and re36 2005 2006 ’07 peatedly turns aside entreaties from Wall Street to boost profit margins by raising prices. Sinegal, 71, sets an example by taking a modest salary of $350,000 before options, staying in modestly priced hotels and putting in 15-hour days to meet an ambitious goal of visiting all 506 stores twice a year. “Jim would be on any intelligent list of the top 10 retailers of the past century,” says Charlie Munger, a Costco director who’s better known as Warren Buffett’s long-time partner at Berkshire Hathaway. —A.B.
Fred Smith
FedEx, CEO since ’71
Ratan Tata
Tata Sons, CEO since ‘91
Jong-Yong Yun
Samsung Electronics, CEO since ’96
Why: An overnight sensation delivers the goods in China s one of the great entrepreneurs in American history, Smith pioneered the overnight package delivery business in the 1970s, expanding on an idea he Annualized Price Change developed as a student at Yale. One Year 6.5% He went on to make FedEx a While CEO 18.9% S&P 500 9.7% strong competitor to United Par2007 P/ E 15.9 cel Service and the post office in 5-Yr. Profit Growth 27.0% ground package deliveries. And he anticipated China’s economic $120 FDX / NYSE potential more than two decades ago. FedEx, now the lead100 ing international express carrier in China, said last week it will 80 soon inaugurate next-day domestic express service servicing 19 60 2005 2006 ’07 Chinese cities. Not all of Smith’s initiatives have been successful. In 2004, he paid $2.4 billion for Kinko’s, the chain of copier stores whose performance has been poor. But FedEx profits have tripled in the past five years, and Smith usually makes the right moves. One of his latest: cancelling orders for Airbus 380 freighters soon after the company acknowledged production delays. UPS waited until March. —A.B.
Why: Riding the elephant atan Tata, 69, is the face of India Inc., overseeing an empire that includes everything from fine tea to IT. As chairman of Tata Steel—just one of his roles—he recently drove the Annualized Price Change firm’s $12 billion purchase of One Year 2.7% Corus, an Anglo-Dutch producer While CEO 13.7% S&P 500 10.7% four times its size, creating the 2007 P/ E 6.1 world’s fifth-largest steelmaker. 5-Yr. Profit Growth 38.1% He also chairs Tata Tea, Tata Motors, and IT services behemoth INR900 TATA STEEL / India Tata Consultancy. He chairs the 700 executive committee of Mumbai’s Tata Sons, which owns big stakes 500 in all these firms and sets the 300 group’s overall strategy. Ratan Tata worked at a blast 100 furnace at Tata Steel at the age of 2005 2006 ’07 26, studied architecture at Cornell and management at Harvard, and became chairman of the group in 1991, 150 years after it was founded by an ancestor. India then was emerging from socialism, and Tata was a sprawling network of 250 companies, many doing poorly. He chopped that to 96 and took Tata Consultancy public. Those shares are up 50% since. Not content to operate only in India, he’s challenging managers to expand overseas. —L.P.N.
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Why: Climbing to the top of the world, one gadget at a time ho would have guessed that Samsung one day would be as much of a household name as Sony or Maytag? That day is just about here, thanks to Annualized Price Change Yun. Its often-sleek cellphones One Year -17.5% rank No. 3 in sales worldwide. The While CEO 27.2% S&P 500 7.9% tech Website CNET loves its LCDs. 2007 P/ E 10.5 Its household appliances, includ5-Yr. Profit Growth 7.4% ing washers, dryers and refrigerators, also rank high with consum900W thousand ers in name recognition. And Sam- 005930 / Korea sung chips are in almost all your gad700 gets. Yun, 63, has been Samsung’s 500 chief for more than 10 years. By 2006, the company was posting 300 net income of a staggering 7.93 2005 2006 ’07 trillion won ($8.4 billion). These days Samsung faces some headwinds. The Korean won has surged, squeezing export profits. Competition is stiffening across the board, and Samsung has been caught up in government probes of price fixing. But Yun, who steadied Samsung after the Asia crisis of the ‘90s, could well prevail. Ask him about his goal of doubling 2004’s revenue by 2010 and he smiles. “I’m confident,” he says. —L.P.N.
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