While there's no sure thing in the investment game, a sound alternative may be to place bets on companies with top-performing chief executives. Among the most popular investments are those made in companies with outstanding leaders making the right moves. Certainly, that was the case with more than 200 of the largest portfolio managers in America. More recently, Stanley Gault led Rubbermaid to outstanding performance, which was reflected in superior stock-price growth. When struggling Goodyear tapped him as CEO, investors in the giant rubber company saw their stock rise several hundred percent in a year.
Most stocks trail market averages over time.
Truly spectacular gains by roughly one-quarter of all companies lift market averages. To document the relationship between CEOs and shareholder value, we charted the stocks of 800 large public companies from 1989 to 1991 with one CEO at the helm in that time. William Gates' Microsoft followed with share growth of 526 percent. Trailing the leaders were Philip Knight's Nike at 446 percent and Donald Fisher's The Gap at 412 percent. Merck's Roy Vagelos is CEO's 1992 Chief Executive of the Year.