As far as CEOs go, not many public companies can match the stock performance of Domino’s Pizza, Inc. (NYSE:DPZ) over the past eight years.
Patrick Doyle — the man who took over a pizza franchise in 2010 that was in transition, almost single-handedly turned it into a shareholders’ dream stock — is retiring after eight years in the top job.
The story about Doyle’s time as Domino’s CEO should be required reading by all new chief executives. While Doyle held a number of senior positions at Domino’s and other companies prior to joining the pizza franchise in 1997, he’d never been a CEO of a Fortune 500 company.
If it wasn’t for the CEO at the time — David Brandon — leaving the company to become the Athletic Director of the University of Michigan, Doyle’s corporate story might have turned out much differently.
Thankfully, for DPZ shareholders, Brandon did leave and the rest is history.
Looking for some other CEOs who delivered for shareholders over the past eight years? Here are seven other possibilities.
CEOs Who’ve Delivered for Shareholders: Douglas Lebda, LendingTree (TREE)
Years as CEO: 21
Total Return Since March 7, 2010: 3,216%
Is LendingTree Inc (NASDAQ:TREE) CEO Doug Lebda overpaid? The Charlotte Observer seems to think so.
In an April 30 article about the fintech company, it pointed out that Lebda made $60 million in 2017, 549 times what the average LendingTree employee was paid. When you put it like that it’s hard to argue the point. Facts are facts — all Fortune 500 CEOs are overpaid.
However, when you consider what Lebda’s delivered for shareholders over the past eight years, it’s equally difficult to say he hasn’t done what the company, which he founded, and shareholders have asked of him: to deliver index-beating returns.
I’d much rather have been a LendingTree shareholder over the past eight years than one of the poor souls who owned Sears Holdings Corp (NASDAQ:SHLD). With modern technology, they don’t even have the share certificates to paper their walls.
Since 2009, LendingTree’s operating income has grown from a $45 million loss to a $58 million profit in the past year on record revenue.
And, heck, the average lending tree employee made $108,536 in 2017, itself a very handsome reward for a year’s work, don’t you think?
CEOs Who’ve Delivered for Shareholders: Reed Hastings, Netflix (NFLX)
Years as CEO: 20
Total Return Since March 7, 2010: 3,152%
What can you say about Reed Hastings that hasn’t already been said? If not for the brilliant decision to pivot from a DVD-driven business model to video streaming monthly subscription model we know today, we wouldn’t be talking about him or Netflix, Inc. (NASDAQ:NFLX).
When Netflix went public on May 22, 2002, at $15 a share, valuing the DVD startup at $300 million. When it added video streaming in 2007, it had a market cap of less than $2 billion — today, it’s 69 times more valuable.
In hindsight, we know I totally blew the call. It happens.
Fortunately, I’ve come to my senses. Here’s what I had to say in March about Netflix’s spending on content.
“Five years ago, Netflix had 33.3 million total streaming subscribers and an operating profit of $50 million. That meant an operating profit of $1.50 per subscriber. Today, that number is $6.93 or 362% higher,” I wrote March 1. “As long as this figure continues to rise, Netflix is going to keep spending on content. And living with negative free cash flow.
“In return, investors will get a higher Netflix stock price.”
Indeed, they will.
CEOs Who’ve Delivered for Shareholders: Michael Minogue, Abiomed (ABMD)
Years as CEO: 14
Total Return Since March 7, 2010: 2,703%
Although Abiomed, Inc. (NASDAQ:ABMD) is the one company on the list of CEOs delivering for shareholders that I’m not very familiar with, that doesn’t mean I’m not impressed by maker of heart pumps’ performance over the past eight years.
Of course, if you’re like me and haven’t been paying attention to Abiomed stock, you really just want to know if the gravy train will continue.
The company announced Q4 2018 earnings May 3 and they were a thing of beauty.
On the top-line, revenues increased 40% to $124.7 million on a 147% increase in net earnings to $36.8 million. For the entire fiscal 2018, Abiomed increased revenues and net profits by 33% and 115% respectively.
Its outlook for fiscal 2019 is sunny and bright.
“Abiomed delivered another record quarter and fiscal year,” stated CEO Michael Minogue. “Fiscal 2019 is positioned to be another outstanding year and we appreciate the investment from our shareholders.”
I think long-time Abiomed shareholders probably feel the same about the CEO.
CEOs Who’ve Delivered for Shareholders: Kenneth McBride, Stamps.com (STMP)
Years as CEO: 17
Total Return Since March 7, 2010: 2,571%
Of all the companies on this list, Stamps.com Inc. (NASDAQ:STMP) would have to be the most surprising of the CEOs who’ve delivered for shareholders.
Stamps are the modern-day equivalent of the horse and buggy. How did a company founded on providing stamps and postage over the internet, ever survive?
Well, the simple answer is e-commerce companies came along to save its bacon, but the reality is current CEO Ken McBride had to pull a lot of levers to get the company profitable including cutting costs, reducing marketing and generally innovating its way out of a jam.
It’s this transformation that got McBride awarded the 2014 EY Entrepreneur of the Year for Business Services in the Los Angeles area. Suffice to say, once McBride took the reins, STMP moved higher.
Last August, I recommended STMP as a good momentum play. Up 23% year to date through May 2, I still think it’s a good momentum play.
CEOs Who’ve Delivered for Shareholders: Jen-Hsun Huang, Nvidia (NVDA)
Years as CEO: 24
Total Return Since March 7, 2010: 1,327%
The semiconductor companies are some of the most widely-followed stocks in America. It’s hard not to find opinions, both long and short, about the various players.
Nvidia Corporation (NASDAQ:NVDA) is one such business. CEO Jen-Hsun Huang co-founded the company in 1993, serving as its chief executive ever since. A net worth of $5.6 billion, Huang’s grown Nvidia from a tiny business with $1.2 million in annual revenue (1995) to $3.0 billion in net income, not revenue, in 2017.
While its growth over the past eight years has been significant, it’s entirely possible that growth over the next eight years will be even greater.
In October, I predicted that Nvidia stock would hit $350 before Advanced Micro Devices, Inc. (NASDAQ:AMD) hit $25. As of May 3, Nvidia is 35% away from its target while AMD needs to appreciate 129% to meet theirs.
“As opposed to last year’s lack of gaming launches, 2018 has already brought on titles like PlayerUnknown’s Battlegrounds and Fortnite, which are driving a revitalized cycle in gaming communities,” Barclays analyst Blayne Curtis recently said. “Nvidia is also gaining share, which should be bolstered by the launch of Volta later this year and should have plenty of runway.”
AMD has its supporters, and that’s great, but Nvidia is the better company — and the better stock.
CEOs Who’ve Delivered for Shareholders: Paul Sarvadi, Insperity (NSP)
Years as CEO: 28
Total Return Since March 7, 2010: 1,132%
Most people thought it was a temporary staffing agency when in fact it’s a full-service human resources company that provides business solutions for the various aspects of running a business including payroll, recruiting services, expense management, etc.
Since that fateful decision, NSP stock is up eight-fold.
CEO Paul Sarvadi co-founded the company in 1986, stepping into the CEO role in 1989. I had never heard of Administaff, nor Insperity, so I was very surprised to find it on my list. Flying under the radar isn’t a bad thing when your customers know who you are and that’s all that really matters.
It seems like a lot of companies in corporate America these days are delivering strong earnings. Insperity is no different announcing earnings April 30 that beat estimates. Even better, if you’re a shareholder, it raised 2018 guidance.
“We are pleased to report these outstanding record results reflecting our dynamic business model and strong execution all across the company,” said Sarvadi in its earnings release. “Our key drivers to growth and profitability are in place setting up a fourth consecutive year of impressive earnings growth for 2018.”
You know what they say: share prices follow earnings over the long haul. Four years of strong earnings has translated into big returns for shareholders.
Given human capital management is a significant growth area in the American economy, I see robust earnings in the years to come.
CEOs Who’ve Delivered for Shareholders: Jeff Bezos, Amazon (AMZN)
Years as CEO: 21
Total Return Since March 7, 2010: 1,118%
Jeff Bezos, who?
Probably the biggest shock of this entire article is that Amazon.com, Inc. (NASDAQ:AMZN) ranked last in terms of stock performance since March 7, 2010.
Didn’t the CEO and founder become the world’s wealthiest person because of its stock price? It seems almost pedestrian in comparison to LendingTree’s 3,216% over the same period.
But I digress.
I’m generally a fan of Bezos’ management philosophy and attitude toward customers. No single person in retail has disrupted the industry as he has and given his propensity to innovate and challenge the status quo, I don’t imagine things are going to be much different over the next eight years at Amazon.
For example, Amazon just launched Wag, the company’s own dry dog food brand, available only to Prime subscribers. As a cat owner and Prime member, I sure hope they extend the line to include cat food.
As I stated in an article in March, Amazon is after virtually every dollar you spend on and in your home. Pet food and other pet supplies being part of the equation.
It’s not that Bezos and company think it can corner the market when it comes to pet supplies — although it could if Petsmart’s owners drown in the debt accumulated trying to keep up with Amazon — it merely wants to keep pet owners thinking about buying through the company’s website.
It’s brilliant. He’s brilliant. AMZN stock is brilliant.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.