Announcing Morningstar's CEO of the Year Award Finalists
Three CEOs stand out when it comes to creating value for shareholders.
At Morningstar, we focus on identifying companies with sustainable competitive advantages, or moats, as we believe these types of businesses are the most likely to reward shareholders over the long run. But moats aren't created or maintained in a vacuum; managers have a large part to play. As Berkshire Hathaway vice chairman Charlie Munger has succinctly stated, "The only duty of [the] corporate executive is to widen the moat." With technological advances, an increasingly global marketplace, and the relentless nature of competition, the stewardship of a moat is not a simple task, and we believe assessing the quality of management is a critical step in analyzing any company. To highlight the importance of good management, each year we recognize one manager as the CEO of the Year.
Our stewardship methodology goes beyond basic corporate-governance practices and focuses on capital allocation and long-term value creation for shareholders. In assigning a stewardship rating, our analysts consider a company's investment strategy, history of investment timing and valuation, financial leverage, dividend and share-buyback policies, execution, management compensation, related-party transactions, and accounting practices. If we believe a management team has made exceptionally strong capital-allocation decisions and will continue to do so, we award an Exemplary stewardship rating. Less than 10% of our coverage earns this rating.
Brett Horn has a position in the following securities mentioned above: WFC. Find out about Morningstar’s editorial policies.