Twenty five Chief Executive Officers (CEOs) made a total of N1.81 trillion for their shareholders in 2012, BusinessDay Research analysis shows.
The 25 CEOs accounted for 74 per cent of the N2.44 trillion market gain made by the Nigerian Stock Market in 2012.
The 25 CEOs responsible for the market gain are the focus of a BusinessDay special report released today.
The report identifies the CEOs behind the companies that made significant returns to shareholders. All the 25 companies identified in the report outperformed the All Share Index (ASI) by an average two times of the ASI.
Paints and Coatings Manufacturers Plc, a leading manufacturer and supplier of paints and coatings for operators in Nigeria’s oil and gas industry, topped the price gainers chart in 2012 with the company’s share price appreciating by a significant 277 per cent, outperforming the ASI by about eight times and adding N1.14 billion to the company’s value within the year.
BusinessDay Research analysis shows that the company is currently in phase II of its capital expansion plans that will see the establishment of a new factory in Mowe, near Lagos, while expanding its capacity to manufacture locally in 2012. The prospects of the company’s expansion plans may have influenced its significant gain in market value.
As at the third quarter ended September 2012, the company sales stood at N1.8 billion, 38.5 per cent higher than the N1.3 billion for the same period of 2011. The company’s profit after tax also doubled within the same period, rising to N170 million from N83 million, while earnings per share was up 82 per cent to 20 kobo per share from 11 kobo per share.
International Breweries ranked next as the highest performing stock on the Nigerian Stock Exchange (NSE) with a share price appreciation of 184 per cent, adding N34.26 billion to its market value within the year.
The company’s financial performance within the year may have driven performance. For the 12 months ending December 2012, International Breweries unaudited results released to the Nigerian Stock Exchange (NSE) shows the company sales at N13.26 billion, a 34 per cent increase over sales of N9.91 billion in December 2011. The brewers profit after tax however shows a significant 1,298 per cent jump to N2.06 billion from N147 million, while earnings per share rose to 91 kobo from seven kobo within the same period.
Other companies that made up the top ten on the list of top 25 performing CEOs include Cadbury (154 per cent) Diamond Bank (146 per cent) National Salt Company of Nigeria (97 per cent) GlaxoSmithkline (96 per cent) Presco Plc (96 per cent) CAP Plc (93 per cent) and Airlines Services and Logistics (93 per cent).
Sectoral analysis of the composition of the top 25 firms shows banks had the highest representation with seven banks making the cut. The banks that made the top 25 CEOs include, Diamond Bank, Access Bank, UBA, First Bank of Nigeria Plc, Sterling Bank Plc, GTBank, Zenith Bank Plc and Fidelity Bank Plc.
Three companies in agro business, Presco, Okomu Plc and Livestock Feeds Plc, made it into the top 25 list of high performing companies in 2012. Unilever also made the cut in the Fast Moving Consumer Goods (FMCG) sector.
Share price appreciation is increasingly used to benchmark CEO performance globally, a recent report by US based Wall Street Journal shows. Institutional investors and major shareholders of quoted companies are increasingly linking CEO remuneration to the share price performance of their companies with over 50 top US companies already adopting the model, the Wall Street Journal reports. Share price appreciation is usually seen as an indication that shareholders approve the way a company is being managed.
The BusinessDay Research top 25 best performing CEOs report will be an annual publication. It will also be followed with a dinner and recognition night for the 25 CEOs.
Adapted from BusinessDay