Investing

Best CEOs of 2012

1. Daniel Hesse
> Company: Sprint-Nextel Corp. (NYSE: S)
> Share price YTD: +137%

Hesse, who has run Sprint since late 2007, finally saved the company after a long trail of failed attempts. He did not accomplish the task by improving operations. Rather, Hesse found an investor willing to buy a majority interest in the company — not an easy task given how badly positioned the third-place cellular company in the United States has been. Sprint’s third-quarter results are ample evidence of the difficulty the corporation would have as an independent operation and without outside financial support. While revenue rose 5% to $8.8 billion, Sprint lost $767 million. On October 15, it was announced that SoftBank would invest $20.1 billion in Sprint for an approximately 70% stake. SoftBank CEO Masayoshi Son is expected to invest aggressively in Sprint’s expansion.

Also Read: The Best Housing Markets of 2013

2. John Donahoe
> Company: eBay Inc. (NASDAQ: EBAY)
> Share price YTD: +61%

Donahoe became CEO of eBay in early 2008. Wall St. questioned whether eBay’s core auction business could survive competition from online giant Amazon.com Inc. (NASDAQ: AMZN) and an army of smaller online auction firms. Most investors admired eBay’s PayPal online payment system, while the legacy auction business hampered overall corporate earnings growth. That has changed. In the third quarter, the results of the renewed drive into the auction business showed. Marketplace revenue rose 9% to $1.8 billion of eBay’s total revenue of $3.4 billion. The company also has had success in the critical mobile market, which has taken on additional importance as more and more e-commerce is done on smartphones. In the most recent quarter, 800,000 of the company’s new users came from mobile as, according to the company, downloads of eBay’s suite of mobile apps have surpassed 100 million globally.

3. David Nelms
> Company: Discover Financial Services (NYSE: DFS)
> Share price YTD: +63%

Discover’s greatest challenge is that it is second in its industry to American Express Co. (NYSE: AXP) and competes indirectly with bank cards connected to Visa Inc. (NYSE: V) and MasterCard Inc. (NYSE: MA). Nelms took over as CEO in 2004. One of the most critical strategic moves he made is the takeover of smaller rival Diners Club in early 2008. The consolidation helped keep Discover competitive because it expanded the company’s market share overseas. More recently, but just as important, is the extent to which Discover has evolved into a lending company, with sizable student and home loan businesses. “Discover Home Loan” was launched in June. Nelms also has buttressed international operations with a deal to move the company more aggressively into China and Russia.

4. Christopher Connor
> Company: Sherwin-Williams Co. (NYSE: SHW)
> Share price YTD: +63%

Connor took over as head of 146-year-old Sherwin-Williams in 1999. Some of the improvement in the company’s performance in the past year could be attributed to luck. The housing market has improved substantially, and Sherwin-Williams has 30% of the domestic paint market. The company has used the leverage that its own store network gives it to great advantage. In the most recent quarter, same-store sales rose 8.9%. More impressively, earnings per share (EPS) rose 31.0% to a record $2.24. Connor’s most important decision this year was to increase the share of the company’s international operations so that it is not as reliant on the U.S. market. In November, the company announced it would buy Consorcio Comex, based in Mexico, for $2.34 billion. Its business operations in Mexico mirror those of Sherwin-Williams in the U.S. Last year, Comex had revenue of $1.4 billion. Wall St. applauded the decision, driving its share price to a 52-week high within a week of the buyout announcement on November 12.

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