If Jamie Dimon is the larger-than-life Babe Ruth of banking CEOs, Brian Moynihan is the Cal Ripken Jr., the steady Baltimore Orioles Hall of Famer who broke Lou Gehrig’s record for most consecutive games played.
So says Mike Mayo,
banking analyst, who adds, “Moynihan is the opposite of Ruth, who pointed to the outfield and hit a home run, and more like Ripken, who grinded it out every day.
Bank of America
(ticker: BAC) is a machine and has churned out consistently improving earnings and returns.”
Moynihan, 59, took over in 2010 when Bank of America, still mired in postcrisis legal and regulatory problems, was operating at a loss. In contrast, earnings last year hit a record $28 billion, and the company’s stock market value recently was $265 billion, second in the domestic banking industry to JPMorgan Chase and above longtime rival Wells Fargo.
Moynihan deserves considerable credit for this success. Bank of America now operates the country’s leading consumer and commercial banking franchises, and its wealth management unit, anchored by Merrill Lynch, has the industry’s best margins.
The CEO’s mantra is “responsible growth.” While that might sound like corporate speak, it’s a motivating force for his 205,000 employees. To Moynihan, that means treating customers and borrowers fairly, controlling risk, acting to limit global warming, and “creating the best place for our teammates to work.” For consumers, this translates into no-fee checking accounts if they have direct deposit of at least $250 a month, as well as an option to avoid overdraft fees. For risk control, it means making consumer loans directly, rather than buying them in the secondary market. Says Moynihan: “We look every mortgage customer in the eye.”
boss, is Moynihan’s biggest fan, calling him the “most underestimated bank executive in the country. He’s done everything he said he would do.” One thing Moynihan might wish he hadn’t done: issuing $5 billion of preferred stock in 2011 to Berkshire, which converted into Bank of America common stock at $7 a share. That helped make Berkshire BofA’s largest shareholder and cost the bank about $15 billion.
Applied Materials (CEO since 2013)
“In my career, I’ve done the best in softer market environments,” says Dickerson.
shares (AMAT) are up almost twice as much as the S&P 500 this year, despite a downturn in demand and pricing for semiconductors, which has led chip makers to pull back on orders for the type of equipment Applied sells. To manage during a slowdown, it’s important to have a point of view, and courage, says Dickerson. He says that the chip business has gotten steadier with the advent of new types of smart devices and the market is on the cusp of its biggest transformation in his lifetime, from the rise of big data and artificial intelligence.
The world won’t be able to produce enough power to process available data using today’s chip-making technology, says Dickerson. New materials and manufacturing techniques are needed, one reason the company announced a new research facility late last year in Albany, N.Y. “In the next couple of years our business will strengthen considerably,” he says. “Now is the time to be ready.”
JPMorgan Chase (CEO since 2006)
Dimon’s views are sought by world leaders and bankers, but he gets a mixed reception on Capitol Hill, where he and other bank CEOs found themselves under fire this year for their ample pay and the industry’s past misdeeds. Dimon, 63, is also a favorite of investors, who’d like him to make good on his pledge to remain CEO into 2023—and possibly beyond.
On his watch,
(JPM) has become the top U.S. bank, with leading positions in all of its major businesses, the best returns among its peers, and the deepest management team. In the Dimon era, JPM’s shares have bested rivals’ by a wide margin.
If Dimon is right and the bank’s profits are more resilient than some Wall Streeters think they are, the stock could garner a higher valuation than today’s 11 times earnings. Dimon doesn’t obsess about the shares, however, telling Barron’s that his message to employees is “build, build, build; do right by your customers and communities, and the stock will take care of itself.”
Royal Caribbean Cruises (CEO since 1988)
Fain, 71, continues to steer the ship with a strong hand.
Royal Caribbean Cruises
(RCL) paid $1 billion last July for a majority stake in Silversea Cruises, which specializes in luxury and expeditionary travel. Meanwhile, a new app is shortening check-in waiting time.
Recently, Royal Caribbean spent about $250 million to transform its own island in the Bahamas. Attractions include beaches, restaurants, and a towering water slide. “You can thrill or chill,” Fain says of the island paradise.
Investors have thrilled; the stock has handily outperformed peers in the past 12 months, helped by robust pricing and strong bookings. Says Fain: “The cruise industry is really in the sweet spot of what people are looking for today.”
–Lawrence C. Strauss
MSCI (CEO since 1998)
Under Fernandez, 61,
(MSCI) has become one of the premier providers of investment indexes, a profitable move as the world has tilted more toward passive investing.
Fernandez and his family became political refugees as a result of Nicaragua’s 1979 revolution. He attended college and business school in the U.S., worked at
(MS), and then left to start several businesses. Fernandez returned to Morgan Stanley in 1994 to work under John Mack, and quickly realized the importance of MSCI. He thought he could blanket the world with futures and options on indexes and create indexes for new markets. MSCI came public in 2007.
Today, MSCI calculates more than 215,500 general benchmarks and 12,000 custom benchmarks for clients each day. As Fernandez sees it, MSCI is critical to capitalism: “The investment industry is one of the most important industries in a society that uses savings to fund productivity investment,” he says.
–Leslie P. Norton
Estée Lauder (CEO since 2009)
Freda, 61, has mastered the extreme makeover. Over nearly a decade, the former Procter & Gamble executive has more than doubled operating profitability at family-controlled
(EL), the skin-care and cosmetics giant. He has restored the beauty of aging brands and groomed upstarts, such as Smashbox and Glamglow, into lucrative properties. Marrying data and creativity, he has freshened the company’s digital strategy and boosted its brands’ desirability among China’s luxury-focused millennials. U.S-China tensions haven’t dented demand.
Estée Lauder has raised its current fiscal-year outlook three times. If the past decade cemented Freda’s turnaround credentials, the next could earn him trendsetter status: “Wherever there is growth or something emerging, we will be the first,” he says.
Lockheed Martin (CEO since 2013)
Hewson weathered a government budget sequestration that slowed defense spending, and guided
(LMT) through two big deals: the $9 billion purchase in 2015 of
’ (UTX) Sikorsky helicopter unit and the $6 billion sale of Lockheed’s information-systems business in 2016.
The Joint Strike Fighter, or F-35 jet program, is the Department of Defense’s largest, accounting for about a quarter of Lockheed’s sales. Other countries are customers, too. Hewson, 65, dealt with cost overruns while more than doubling sales. She also kept profit margins stable, despite offering the U.S. a significant discount after President Trump said the plane was too expensive.
Hewson has cited the need to “stay ahead of adversaries” in security. To do so, Lockheed is incorporating new technologies, such as digital modeling, virtual reality, and advanced sensors. They are protecting shareholders, too.
(CEO since 2005)
Even by Disney’s standards, 2019 is a busy year. Avengers: Endgame is close to passing Avatar as the biggest-ever global box-office film.
(DIS) controls both franchises; the latter came with its buyout of TV and movie assets from Fox, completed in March. A Star Wars–themed area just opened at Disneyland in California, and another will open soon at Disney World in Florida. The movie slate remains packed, and November brings a new streaming service called Disney+.
At the center of it all is Iger, 68, who led Disney’s purchases of Pixar, Marvel, and Lucasfilm, then turned hit films from each into rides, lands, cruises, spinoffs, and more. Parks and movies now outearn TV for the company, derisking Disney’s push beyond the cable bundle. “We’re not launching Disney+ to catch up to
[NFLX] or even compete with them,” says Iger. “The marketplace is hungry for this, and we have a brand people know and love.”
Costco Wholesale (CEO since 2012)
Expert execution has helped
(COST) compete with Amazon.com. Lately, credit goes to Jelinek, 66, who succeeded co-founder Jim Sinegal and improved on his winning strategy.
Jelinek has led the successful expansion of Costco, including internationally. The company is opening warehouse stores and Costco Business Centers at a fairly rapid clip, and growing its e-commerce unit without cannibalizing its bricks-and-mortar operations. Same-store sales keep rising, and Costco has more cash than debt.
While Costco is known for bargains, its best value arguably is in its shares. Under Jelinek, they’ve trounced rivals’.
Microsoft (CEO since 2014)
When Nadella became president of
(MSFT) server and tools division in 2011, then-CEO Steve Ballmer said he would be “setting the course to deliver the cloud-computing scenarios of the future.” Well, Ballmer got that right.
Upon succeeding Ballmer as CEO, Nadella, 51, went all in on the cloud. That revived Microsoft’s fortunes and pulled its shares out of a multiyear funk. During his tenure, they’ve rallied more than 260%, versus 64% for the S&P 500 index over the same stretch.
How ironic that, at a time when large tech companies are under heightened scrutiny, Microsoft—once the subject of intense regulatory attention—is again the world’s largest company by stock market cap. That is a reflection of Nadella’s leadership.
–Eric J. Savitz
Adobe (CEO since 2007)
Narayen, 56, has been winning Wall Street’s approval for years. Getting buy-in from the artistic community, which uses Adobe’s (ADBE) Photoshop software for graphic design, has taken longer.
Adobe shares have soared nearly 900% since 2011, when Narayen pushed the company to sell software via subscription. The monthly payments smoothed out sales and boosted earnings, but angered users who weren’t crazy about renting software. But Narayen eventually won them over:
Adobe’s mobile photo app, Lightroom CC, grew its subscriber base by 400% over the last year.
Kering (CEO since 2005)
(KER.France) roots lie in a small wood-trading business in Brittany, founded in 1963 by François Pinault. By the time François-Henri took over his father’s company 14 years ago, it had branched into luxury goods with the acquisition of Gucci. Pinault fils sold the company’s retail operations and made bolt-on acquisitions of other luxury brands. Kering also owns Bottega Veneta and Boucheron.
Today, Kering, which is 40% family owned, is one of the world’s largest luxury-goods sellers. It has been riding high on Chinese millennials’ seemingly endless appetite for high-end leatherware. Pinault, 57, who is married to actress Salma Hayek, keeps an eye on the need for geographical diversification.
NextEra Energy (CEO since 2012)
When Robo joined
(NEE) in 2002, its renewable-energy arm was small and unprofitable. Robo, 56, a General Electric alumnus with a Harvard University M.B.A, was assigned to lead the business. Today, NextEra generates more renewable energy from wind and solar power than any other company in the world.
The stock has tripled since Robo became chief executive, due largely to his strategic and financial discipline. “He is very rigorous, and my perception is that he is working for customers and shareholders around-the-clock,” says T. Rowe Price analyst Ryan Hedrick.
Marriott International (CEO since 2012)
(MAR) became the world’s largest hotelier under Sorenson. His next act: transforming the company into a travel and experience purveyor. The company launched a home-rental business this year and lists more than 100,000 activities on its website, from stadium tours to cooking classes, for which guests earn loyalty points, to boot.
Sorenson, 60, embraces change as a constant, but one thing that has stayed the same is the stock’s stellar performance: Since he took charge, Marriott’s shares have risen 250%, more than double the S&P 500’s gain.
Arista Networks (CEO since 2008)
Ullal, 58, is going after new networking territory, and incumbents should be concerned. The Cisco Systems alum joined then-tiny
(ANET) as CEO with a focus on selling switches and other gear to data centers. “Our competition has gone from an 80% market share to under 50%, and that’s still too high,” she says. “We’ve gone from zero to a high-teens share.”
Now, Arista is pursuing networks connecting end users at office buildings—a $10 billion market, versus $16 billion for data centers. Arista’s revenue is pegged at $2.56 billion this year, up 19%. One key to success has been a focus on programming. “Our hardware is a nice gift wrap, but it’s our software that’s the differentiator,” says Ullal. Arista’s stock has climbed on her watch from an IPO price of $43 five years ago to a recent $240, turning her into a billionaire.
Abbott Laboratories (CEO since 1999)
Few health-care CEOs have created as much value for investors as White, 64. His biggest coup was engineering the 2013 split of
(ABBV), the maker of Humira and other prescription drugs, and the new Abbott, with leading positions in diagnostics, medical devices, and nutrition.
Since then, the combined value of Abbott and AbbVie has soared to $260 billion from $103 billion. Abbott has become one of the steadiest growers in health care, with double-digit annual gains in earnings per share, driven by acquisitions and internally generated products such as FreeStyle Libre, a glucose-monitoring device that doesn’t require finger sticks; it has more than $1 billion in annual sales. White also serves on the boards of