World’s Best CEOs: Growth Leaders

Dickerson has been selling semiconductor equipment for more than 30 years, but two earlier jobs seem newly relevant: overseeing high-tech efforts at units of GM and AT&T. That’s because the semiconductor market, which once depended on personal computers, is seeing surging demand today from auto makers, smartphone companies, and other customers.

Applied Materials (AMAT), the market leader in machines that make silicon wafers and riddle them with circuits to be cut into chips, continues to gain market share. Under Dickerson, Applied has pushed to get in front of customers early in the chip-design process, including at the company’s massive Maydan Technology Center in Silicon Valley.

During the CEO’s tenure, Applied has doubled its silicon revenue, tripled revenue from displays, and multiplied earnings per share more than five times. Research-and-development spending has jumped by 50%. The company’s shares slid 8% recently on news that current-quarter revenue would come in below estimates, but the longer-term outlook is bright.

“I’ve never had more fun,” says Dickerson. “We’re going to see technology advances over the next decade—in health care, cars, telecom, home automation, and more—like nothing we’ve seen in our lifetimes. That will require new combinations of materials, and no one on the planet is in a better position to deliver them.”

—Jack Hough

Jamie Dimon, JPMorgan Chase

Why: The nation’s No. 1 banker delivers the dough for customers and investors—and influences policy, too.


Dimon, 62, has built the most valuable financial company in the country, developing market-leading positions across a range of businesses, including investment banking, private banking, and credit cards. The bank’s heavy investments in technology have allowed it to develop a powerful online-banking platform and gain market share in deposits, putting pressure on regional rivals with less robust web offerings.

An outspoken leader, Dimon has argued in favor of corporate tax cuts, reduced government regulation, and immigration reform, including a path to citizenship for “Dreamers”—undocumented young immigrants. In this year’s 47-page annual shareholder letter, he wrote, “I must confess I don’t understand how anyone could believe an uncompetitive tax system would be good for the United States.”

The CEO also feels strongly about giving ex-convicts a second chance. Dimon has encouraged business to hire them, and has welcomed moves by federal regulators to give banks more flexibility in giving jobs to people who previously were incarcerated.

During his tenure, JPMorgan Chase (JPM) shares have bested those of the bank’s closest rivals and beaten the S&P 500. Given the bank’s results, that could continue. With Dimon planning to remain CEO for another five years, succession isn’t an immediate issue. But the bank has a deep bench, with five qualified executives who could follow him.

—Andrew Bary

Richard Fain, Royal Caribbean Cruises

Why: His 30-year voyage at the helm of the No. 2 cruise line has been a dream for investors.


As captain of Royal Caribbean Cruises for nearly 30 years, Fain has orchestrated a pleasant voyage for shareholders. The cruise line’s stock has sailed past the S&P 500, and rival Carnival Cruise Line’s shares in that span.

Fain, 70, is devoted to details, planning, and strategy. In addition to creating shareholder value, he says, it’s crucial to “focus on our customers’ wish for more and better things to do,” whether it’s dining options, skydiving, or new ports of call.

Part of Fain’s strategy has been to add bigger ships. Royal Caribbean ranks second in berths behind Carnival (CCL). Earlier this year, the company launched Symphony of the Seas, a massive vessel with 5,500 berths.

Stuart Miller, executive chairman of home builder Lennar, has known Fain for many years, and considers him unusual in his blend of skills. “To be a visionary and an operator is very special,” says Miller, adding, “He’s versatile and able to change course as the circumstances change.”

Early this year, Royal Caribbean announced that it had achieved a “double-double”—doubling adjusted 2014 earnings and generating double-digit returns on invested capital. As peak cruise season approaches, the company is in good financial shape, and bookings are at record levels.

Fain isn’t ready to embark on retirement just yet. “I’m happy to do it for as long as the board of directors is happy for me to come to work,” he says.

—Lawrence C. Strauss


Fabrizio Freda, Estée Lauder

Why: He invigorated the company with new brands, new markets, and a fresh focus on millennials.


Estée Lauder’s three biggest beauty brands—its namesake cosmetics label, Clinique, and MAC—pull in about two-thirds of the company’s annual revenue. But Freda, a consumer-products marketing whiz who grew up in Naples, Italy, also has acquired small, upstart brands that are disrupting the industry.

Recent acquisitions include Le Labo, Becca, and Too Faced, which have a strong social-media following and appeal to young women who don’t want their mom’s cosmetics in their purse.

“They understand the consumer better than we do,” Freda says of millennials, who coach senior leaders at the company through a reverse-mentoring program he launched.

Freda, 60, has expanded distribution to high-growth channels including travel-retail outlets in airports, freestanding stores, and e-commerce platforms. Sales in emerging markets, such as China, are thriving in bricks-and-mortar stores and online. His strategy at the family-controlled company has led to annual revenue gains exceeding the broader prestige-cosmetics market’s 4% to 6%. Total revenue has climbed from $7.8 billion in 2010 to an estimated $13.6 billion in fiscal 2018, and adjusted earnings are on track to hit $1.67 billion this year, up more than threefold from eight years ago.

Freda believes that it’s important to give employees “permission to fail,” but says he tells his team, “Please fail cheaply and quickly.”

—Daren Fonda

James Gorman, Morgan Stanley

Why: He tamed the bank’s wilder pre-crisis ways by doubling down on fee-based wealth management.


Gorman learned the lessons of the financial crisis well. Morgan Stanley bought Smith Barney early in his tenure as CEO, absorbing the brokerage’s 11,000 financial advisors. As a result, the firm is much safer today than in 2007, with nearly half of its sales coming from wealth management, rather than trading or other leverage-fueled activities.

Since then, Gorman has overseen a transition within wealth management to fee-generating accounts—more than $1 trillion now—that should help the business prosper, even during weaker markets. While retail investors have flocked to cheap index funds, wealthy clients want hands-on management and are willing to pay for it.

Even though Gorman shrank Morgan Stanley’s trading desk, that division has continued to perform well, regularly outpacing rivals at Goldman Sachs Group (GS). The post-crisis changes have paid off; Morgan Stanley has surpassed Wall Street analysts’ earnings expectations for 10 quarters in a row. Investors rewarded the company by sending its shares up 24% in 2017, and 2% this year.

Gorman, 59, might not have seemed a perfect fit for Wall Street when he arrived 19 years ago from the consulting business. He’s less outspoken than JPMorgan Chase CEO Jamie Dimon. But few bank executives have better grasped the new Wall Street—less exciting but much more consistently profitable.

—Avi Salzman

Arne Sorenson, Marriott International

Why: The Starwood deal and points program are home runs for customers, hotel owners, investors.



Sorenson, 59, a lawyer with Midwest roots, is the first executive outside the Marriott family to run what is now the world’s largest lodging company, with 30 brands and more than 6,500 properties. Company-operated or franchised rooms doubled on his watch, to 1.25 million. The portfolio of Marriott International includes boutique hotels, luxury resorts, and lodging for millennials who want a no-frills place to crash with a good cocktail bar.

Sorenson’s biggest move—the nearly $14 billion deal for Starwood Hotels in 2016—added 400,000 rooms and upscale brands, including the St. Regis and W hotels. The deal also forged the industry’s largest loyalty program with 110 million members—the “moat around our castle,” he says.

In Marriott’s asset-light model, loyalty is the glue binding travelers and hotel owners. The company’s points program drives over half of hotel bookings and spending, Sorenson says, and improves profit margins by keeping the reservation process in-house. It also improves asset values for hotel owners, who pay franchise and management fees, and incentivizes them to develop more hotels with Marriott. Indeed, Marriott has the largest development pipeline in the world, with 465,000 rooms in the works. This year, the company is opening a new hotel, on average, every 16 hours.

Sorenson has grown Marriott without weakening its balance sheet or financial performance. Net income has more than doubled to $1.4 billion since he became chief executive in 2012, and operating profit margins have jumped to 49% from 34%. Success doesn’t insulate it from rival hotel companies or home-sharing, such as Airbnb, but “we’ll perform better the more we can grow our system and drive economies of scale,” he says.

—D.F.

Robert Iger, Walt Disney

Why: He fortified the empire with smart deals, and now aims to future-proof it with streaming services.


ESPN+, disney’s new streaming service, is “essential for the cord-cutting sports fan” and “worth every penny,” according to a recent review by the influential tech site Engadget.com. That’s a good sign for Iger, 67, who announced the service after taking a majority stake in the streaming platform BAMTech from a unit of Major League Baseball last year.

If ESPN+ is a defensive move designed to protect Walt Disney and its cash-cow sports network from declining cable subscriptions, next comes offense in the form of a broader streaming service for Disney movies and shows, expected next year. That’s an answer to Netflix, which is burning cash on content to gather subscribers. “The global consumer has spoken,” says Iger. “We’re looking to modernize media. And with proven brands and high customer affinity, we don’t believe we have to spend like Netflix.”

Disney’s brands include Marvel, Star Wars, and Pixar, all acquired by Iger—and possibly Fox content, pending a successful bid for 21st Century Fox assets.

Disney is dominating the box office this year with releases like Avengers: Infinity War and Black Panther. Its theme parks are booming, bolstered by movie tie-ins. Iger’s cross-merchandising, including cruises and toys, has helped to derisk his movie spending, and boost investment returns. There’s more good news: This former ABC head’s contract was extended through 2021.

—J.H.

Shantanu Narayen, Adobe Systems

Why: Thinking like a venture capitalist has kept the software pioneer ahead of the curve.


Adobe Systems’ dominance in desktop publishing was indisputable in 2007, when Narayen took the helm. But he has never thought much of the status quo. In 2013, he told Barron’s, “I always worry about the start-ups, the people who are in the garage right now inventing new products and not having a business model to preserve.”

That worry has served Adobe well. The company has taken some big risks, including ending the sales of boxed software in favor of a subscription platform that has increased margins and recurring revenue—and its stock price.

Looking back on what has worked, Narayen, 54, tells Barron’s that he has pushed the company to think like a venture-capital firm, which has been key to recognizing new businesses and markets. “We look at it and say: What are the things that characterize the venture community and how do you bring Silicon Valley into Adobe,” he observes.

Last week, Adobe made its third-largest acquisition, buying privately held Magento Commerce for $1.68 billion. Magento allows Adobe to package digital shopping tools into its existing creative and marketing platforms.

Narayen’s other big deal has worked out well. In 2009, he spearheaded Adobe’s $1.8 billion purchase of Omniture, a provider of analytic tools for the web. Digital marketing generated $2.1 billion in revenue for Adobe last year, up 22% from the prior year. Next up? Digital commerce.

—Alex Eule

Aditya Puri, HDFC Bank

Why: He turned a start-up into a banking giant, and helped bring Indians into the modern financial era.


Even after 24 years at the helm, Puri, 67, elicits effusive praise from investors, with descriptions ranging from “one of the most impressive CEOs we have come across” to a “great man who has built a great bank.”

The career banker methodically built a start-up into India’s second-largest private-sector bank by market value. He reliably minted money by serving the country’s burgeoning middle class, and avoided pitfalls like the bad corporate loans and governance scandals now tripping up rivals. Although Puri shuns personal electronic devices and email, he has embraced technology at the bank, using it to tap the country’s millions of unbanked citizens. The goal, he says, is to offer anything related to money, whether for paying bills, securing a mortgage, or investing, at the click of a button, as effortlessly as one downloads movies from Netflix. In this way, he hopes to stay ahead of any Amazon entry into financial services.

HDFC Bank announced this month that, within a year, a search will begin for Puri’s successor; in 2020, he’ll hit the retirement age mandated by India’s central bank. However, he’s mused that the retirement age could be lifted.

HDFC’s leader—in India, the title is managing director—always leaves the office by 5 p.m. He recalls another executive describing the balls that people must juggle, including health, family, and work. “Most of these balls are ceramic. Only one is rubber—your job,” he says.

—Reshma Kapadia

Robert Sands, Constellation Brands

Why: Ay, Corona! Sands created the best growth story in consumer staples, betting big on Mexican beer.


Constellation Brands had humble beginnings as Marvin Sands’ Canandaigua Industries, a seller of bulk wine whose first breakout brand in the 1950s was a cheap, fortified brown-bag affair called Richard’s Wild Irish Rose. Decades of acquisitions in wine and spirits followed, along with a name change to Constellation in 2000.

After Marvin’s son Robert took the helm in 2007 from his brother Richard, one of his first moves was to sell the company’s cheap booze portfolio to focus on premium brands. Then, in 2012, Anheuser-Busch InBev tried to buy Mexico’s Groupo Modelo, but the U.S. Department of Justice balked. The following year, a deal was reached to sell the American rights to brands such as Modelo and Corona, with their U.S. distributor, Constellation, being the natural buyer.

Since then, Constellation has become the best growth story in consumer staples. The stock has shot up from about $20 at the beginning of 2012 to a recent $217. Americans, it turns out, have a great thirst for Mexican beer, and Sands has met it head-on, spending richly on marketing to bring Corona into the mainstream. He expanded distribution to cans and draft, and brought supply in-house, boosting margins. Sands has been investing lately in craft beer and premium spirits, and, yes, marijuana. The company took a minority stake in Canada’s Canopy Growth (WEED.Canada) last year.

—J.H.

Miles White, Abbott Laboratories

Why: This influential deal maker has made Abbott the envy of the pharmaceutical industry.


White probably has created more value for shareholders than any other CEO in health care.

When he became the head of Abbott Laboratories (ABT) in 1999, at 44, it had half the market value of Pfizer (PFE) and Merck (MRK). The combined market value of Abbott and AbbVie (ABBV), which Abbott spun off in 2013, now is more than $300 billion, eclipsing both Pfizer ($210 billion) and Merck ($160 billion), and approaching industry leader Johnson & Johnson (JNJ).

Abbott’s steady earnings growth has been driven by a diverse business mix that includes nutritionals (Similac baby formula), stents, and other cardiovascular devices, and diagnostic equipment, such as a new implantable glucose monitor that allows diabetics to avoid the need for regular finger pricks. Some 65% of sales are outside the U.S., with 42% in the developing world. The stock is up 40% in the past year, and the company has boosted its dividend for 46 straight years. The shares yield 1.9%.

White isn’t afraid to borrow to do deals. The company bought St. Jude Medical for $25 billion, and Alere, a producer of diagnostic equipment, for $4.6 billion, last year.

Long active in Chicago’s cultural, business, and civic scenes, White cut back in recent years to focus on Abbott. He’s a former board chairman of the Field Museum and a director of McDonald’s (MCD) and Caterpillar (CAT).

—A.B.

James Whitehurst, Red Hat

Why: Under Whitehurst, Red Hat is minting money commercializing open-source software.


How does a midsize software company break into the big leagues? It finds a repeatable strategy for winning, according to Whitehurst, whose Red Hat has multiplied eight times in market value, to nearly $29 billion, since he became CEO a decade ago.

Red Hat’s strategy is turning open-source software breakthroughs into commercial best sellers. “We don’t have to invest ahead and guess where technology is going,” says Whitehurst. “We wait for technology to emerge and then we commercialize it.”

Red Hat is best known for Red Hat Enterprise Linux, a polished, paid version of a free computer operating system. Customers get the benefit of speedy updates from a vast community of Linux users, and careful curation by Red Hat to ensure stability. In recent years, Red Hat has expanded its offerings to include OpenStack and OpenShift for cloud computing and Ansible for managing networks. At the core of each is open-source software.

In the latest quarter, revenue grew 23%. Red Hat made a tuck-in purchase of CoreOS, whose Tectonic software rivals OpenShift. The company closed a rising number of deals in the period worth more than $5 million each. Whereas Linux is often deployed by cost-cutters, Red Hat’s newer cloud platforms are viewed by customers as growth investments worth paying up for, says Whitehurst, 51, a Georgia native and former Delta Air Lines executive.

—J.H

Jayshree Ullal, Arista Networks

Why: Her elegant software solutions are stealing Cisco’s thunder and yielding fat profits.



Ullal operates less like a traditional Silicon Valley CEO and more like the leader of a talented theater troupe that has been working together for a long time. Her personal administrator has been with her for 17 years, and her communications director for nearly 30. Some members of her executive team have been colleagues for 25 years, dating back to her days at Cisco Systems, today Arista Networks’ archrival.

During Ullal’s decade at Arista, the networking company has chopped away at Cisco’s market share in the most sophisticated network switches—those that go into cloud data centers. Arista’s stock is up 365% since its initial public offering in June 2014.

Ullal, 57, prefers “coach players,” as she calls them, to run-of-the-mill leaders. “Don’t ever get rusty with your individual contribution skills by being a pure professional manager,” she advises her employees.

Arista’s chief technologist, Ken Duda, still writes software code, she notes. Others point to the white papers that Ullal authors on Arista’s technology.

The company’s latest venture could take even more business from Cisco, by invading its largest market segment: corporate “campus” networks. Arista is betting that more-elegant software built by Duda will change what customers in that market want.

With coach players, each doing his or her best work, Ullal argues that a company can move swiftly and with purpose, unencumbered by the massive bureaucracy that slows down others. From the top of the organizational chart to the bottom, “everyone knows why we’re doing what we’re doing,” she says.

—Tiernan Ray

Andrew Wilson, Electronic Arts

Why: Wilson has excelled at bringing EA into the digital age, a move that helped triple profit margins.


Few companies boast a billion customers. But Wilson, 43, has a goal of connecting that many gamers. He reckons Electronic Arts has strong relationships with 350 million now, including nearly 90 million players of EA Sports games, such as FIFA soccer and Madden football. Many play competitively in leagues, complete with buying and selling teams, sponsorships, and even broadcast rights.

Today, the talk of the gaming world isn’t an EA title, but rather an open-world survival game called Fortnite, made by privately held Epic Games, which has quickly gathered 45 million players. Wilson sees the popularity of Fortnite, including its battle-royale mode of play, as good news. “In almost every case where a new platform, game, or game mode has become popular, it has served to grow the market and get more people to play games,” he says.

Does the success of Fortnite suggest new elements for EA games? “The world should expect that EA is listening and learning,” Wilson says.

An Australian who surfs and practices Brazilian jujitsu, Wilson has excelled at bringing EA into the digital age, with services, game downloads, add-on content, and more now bringing in more than twice as much revenue as store-bought games. As a result, operating margins have ballooned from under 10% five years ago to 33% in the past year. Analysts predict that margins will top 45% within five years.

—J.H.


Email: editors@barrons.com

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