Every chief executive talks about creating shareholder value, but which ones walk the walk?

While the investment trust industry can count on 27 managers with at least 20 years under their belt at the same firm, there are very few FTSE 100 chief executives with that kind of track record.

The most obvious is Simon Wolfson (pictured), who has headed Leicestershire-based high street retailer Next (NXT) since May 2001.

To his enormous credit, Wolfson has masterminded the firm’s transformation from niche fashion brand to one of the country’s leading store-based and online operators.

In the process, the Next share price has risen from 975p when Wolfson became CEO to over £62 today, an increase of more than 500%.

At the same time, the firm has distributed £22.60 in dividends meaning the total return for investors over the last 21 years has been more than 700%.

Wolfson is an outlier, however, so in order to create a more level playing field we have taken the total returns – that is the gain in the share price plus dividends paid out – of all the FTSE 100 companies over the last 10 years and ranked them from best to worst.

A CLASS APART

Top of the table by a long way are two firms with completely different business models serving completely different markets.

Both suffered a setback due to Covid, for different reasons, yet both have emerged stronger than they were before the pandemic.

Top of the class is equipment hire firm Ashtead (AHT) which has generated total returns for shareholders of 2,050% over the past decade.

In other words, if you had bought £1,000 worth of stock in May 2012 your investment would now be worth £20,500 even though the share price is down 18% this year.

Chief executive Brendan Horgan can’t take all the credit, having only taken over the top job in 2019, but he has been with Ashtead for almost his entire working life since joining its Sunbelt Rentals division in 1996 at 23 years of age.

Horgan’s predecessor at the top was no-nonsense Yorkshireman Geoff Drabble, who spent 12 years at the helm growing the firm’s presence across North America and generated a 10-fold rise in the share price from 150p to £15.50 during his tenure.

Drabble is now chairman of packaging firm DS Smith (SMDS) and a non-executive director of fitted kitchen maker Howden Joinery (HWDN), another firm which has generated a stellar return for shareholders over the past 10 years.

Not far behind Ashtead is the self-styled ‘king of trainers’, JD Sports Fashion (JD.), with a total return of 1,730% since May 2012.

The Lancashire-based firm sells branded sports and casual wear, combining global brands such as Nike, Adidas, Puma and The North Face, with own brand labels such as Pink Soda and Supply & Demand.

It also sells products for outdoor lifestyle fans from a range of brands including Blacks, Millets, Ultimate Outdoors, Tiso, Go Outdoors, Go Fishing and Naylors.

Executive chairman Peter Cowgill has held the reins since 2004, but he joined the firm to keep the books in the mid-1980s when it was little more than a few local sports shops.

Barry Bown was CEO between 2000 and 2014 but Cowgill has since adopted both the CEO and chairman role.

Cowgill is currently embroiled in a row with the UK’s Competition and Markets Authority, which last year decided the 2019 acquisition of Footasylum could harm consumers through lack of choice and ordered JD Sports to sell the business.

Were it not for the shares having lost more than a third since the start of 2022, investors’ 10-year total returns might well have even eclipsed those of Ashtead.

Yet they still dwarf the returns of Sports Direct owner Frasers (FRAS), whose ebullient chief executive and majority owner Mike Ashley once pledged to ‘destroy’ JD Sports.

In the event, Ashley’s ‘pile it high, sell it cheap’ strategy has proved no match for Cowgill’s strategy of making JD stores a ‘smart destination’ for those who can’t give up their obsession with must-have sports footwear.

Female CEOs are still rare in the FTSE 100

The number of female chief executives has increased by one with the appointment of Jennie Daly as the head of housebuilder Taylor Wimpey (TW.), but the FTSE is still very much male-dominated with almost nine out of 10 firms run by men.

Liv Garfield of Severn Trent (SVT) is the longest-serving female chief executive, having taken up the post in April 2014, while other well-known bosses include Amanda Blanc (pictured) at Aviva (AV.), Emma Walmsley at GlaxoSmithKline (GSK), Carolyn McCall at ITV (ITV) and Alison Rose at NatWest (NWG).

TIME BEFORE THE MAST

Looking at the rest of the top 10 FTSE 100 stocks ranked by 10-year returns, time spent in senior management does seem to be a factor.

Tim Steiner, chief executive of online grocery delivery firm Ocado (OCDO), has been in the role since 2000 and has made shareholders eight times their money over the past decade.

Given Ocado has never paid a dividend this is quite a feat, and as with JD Sports were it not for a thumping loss year-to-date the total return would be even higher.

Ian Page, chief executive of veterinary drug maker Dechra Pharmaceuticals (DPH), has steered the company since 1997 and has also generated almost an eight-fold return for investors.

Again, had Dechra shares not lost nearly 30% this year that return would look even more impressive.

3i (III) chief Simon Borrows may only have been in the top job for a decade, but in that time, shareholders have enjoyed a return of more  than 750%.

Meanwhile, although he might seem like a newbie having only been chief executive since 2015, Anthony Smurfit of Irish-based packaging firm Smurfit Kappa (SKG) has been a director of the firm since 1989 and quite clearly knows the ropes.

David Sleath, chief executive of property group Segro (SGRO), has been in the top job since 2011 but prior to that he was finance director for five years, so he also knows his way around the business.

NOTABLE EXCEPTIONS

Only three of the top 10 highest-return companies in our table have chief executives who have been in the job just a few years.

Global sports betting and gaming company Entain (ENT) has generated a 10-fold return for shareholders over the last 10 years, but sadly new chief executive Jette Nygaard-Andersen can’t claim any of the credit having only stepped into the role last year.

The hard work started in 2012 when a revamped GVC teamed up with William Hill to buy Sportingbet, triggering a decade of deal-making which saw it acquire Bwin, Coral and Ladbrokes before establishing a joint venture in the US with MGM Resorts to cash in on the deregulation of gaming and sports betting. In 2020 GVC changed its name to Entain.

In contrast, Andrew Livingston, who took the reins at Howden Joinery in 2018 having previously run Screwfix Direct for five years, can be credited with having made a good fist of growing the business and shareholder returns over the past four years.

Similarly, David Schwimmer deserves praise for dragging London Stock Exchange (LSEG) into the 21st century thanks to his foresight in taking over clearing house LCH, buying a strategic stake in European settlements system Euroclear and acquiring data provider Refinitiv all in under four years.

KEY PERSON RISK

What happens when a long-standing chief executive who has done so much for shareholders during their tenure decides to step down?

We got a glimpse of the future when variety goods retailer B&M European Value (BME) announced on 22 April CEO Simon Arora would retire in 12 months’ time.

B&M’s shares dropped 7% on the news, although if we’re being generous the announcement did coincide with a downbeat UK retail sales report from the Office for National Statistics.

Despite Arora having led the firm for 17 years, the fact it only floated in 2014 meant we couldn’t include it or him in our FTSE 100 survey, but the market reaction to the news is instructive nonetheless.

It may be no coincidence that the seasoned chief executive of a popular retailer, moreover one which might be expected to benefit as shoppers trade down in order to save money, is stepping away from the business as the UK faces its toughest cost-of-living squeeze in several decades.

We can’t help but wonder what the reaction will be when Next’s Simon Wolfson decides to up sticks, although there’s no indication whatsoever that is about to happen.

Even Wolfson admits, however, the retail sector is in uncharted waters with inflation tearing up and incomes going down due to the removal of the energy price cap and the hike in National Insurance contributions.

In an interview with Business Live, the Next boss conceded his growth forecasts for this year were based on intuition rather than historical precedent.

‘We don’t have the history to give us a guide,’ he cautioned. ‘We’ve never seen anything like this. We don’t know how it’s going to pan out.’

Who’s new in the hot seat of FTSE 100 companies for 2022?

This year has been relatively busy in terms of boardroom changes with several firms waving goodbye to their chief executive or chief financial officer.

Mining group Anglo American (AAL) welcomed insider Duncan Wanblad (pictured) as its replacement for long-serving chief executive Mark Cutifani. The latter is undoubtedly a tough act to follow but with 30 years of mining experience and an in-depth knowledge of Anglo American itself Wanblad is a shrewd choice.

Paul Venables, who has held the role of group finance director at recruitment specialist Hays (HAS) since 2006 and helped steer the firm through several cycles, is to step down at the end of September.

His successor James Hilton has been at the firm since 2008 and worked closely with Venables meaning the transition should be smooth.

Mike Wells, chief executive of insurer Prudential (PRU), stepped down in March and is replaced on a temporary basis by finance director Mark FitzPatrick while the board conducts a search for a new CEO.

There were several more changes in March, the most high-profile being the arrival of Italian fashion house Gianni Versace’s former chief executive Jonathan Akeroyd to head up UK firm Burberry (BRBY) after the departure of Marco Gobbetti.

Earlier in his career, Akeroyd was chief executive of British fashion brand Alexander McQueen and is credited with stopping its slide into obscurity and then leading its global expansion.

Elsewhere, medical devices form Smith & Nephew (SN.) announced chief executive Roland Diggelmann was leaving, to be replaced by former Abbott Labs and Siemens Healthineers executive Deepak Nath.

Asset manager M&G (MNG) said in April its chief executive John Foley would retire. He’s been the boss since 2015 and oversaw the merger of Prudential UK and M&G Investments in 2017 and the demerger of M&G from the broader Prudential group in 2019.

Recent research by recruitment firm Robert Half International found 68% of FTSE 100 chief executives were recruited internally compared with just 46% before the pandemic, suggesting firms are getting better at managing the issue of succession planning.

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