In family business, being successful doesn't necessarily mean you're doing well in dollars and cents. If your family isn't squabbling over who should be boss, or wrestling with decades of habit to bring the independence of your board up to speed – and business isn't suffering – then you're not doing badly at all. Families in Business examines the world's ten most successful family business CEOs, ranking equally by sales or revenue and the decisions and achievements the CEO has made during the year. All inheritor CEOs have worked to earn their place, bringing in major deals for their companies on their own merit prior to taking on the top job. Watch for these guys in 2006, writes Melanie Stern
Corporate firefighter: Lee Scott, Wal-Mart
2004 dividend $0.60
2003 dividend $0.52
2004 net sales $285.2 billion
2003 net sales $256.3 billion
Share ownership Walton family, 40%
At a sprightly 56 years of age and only five years into perhaps the meatiest job in corporate America, Wal-Mart CEO and veteran employee Lee Scott is hardly ready to give up his throne. But with the arrival in late September of family member Jim Walton to the board of directors came the announcement that John Menzer and Mike Duke, chief executives of Wal-Mart's global business and domestic operations respectively, had done a job swap – perceived to be part of a test in competition for Scott's job. Wal-Mart's stock has lost 22% of its value since Scott took over as CEO, and while the businesses' margins remain tight, Scott's compensation package has bloomed on the back of free share awards worth $4.5 million (at January 2005) – hardly the incentive strategy of the century. Still, Scott puts Wal-Mart at the top of our list as sales are up, and business operations in places like China and South America look promising for 2006.
Model succession: Marilyn Carlson Nelson, Carlson Companies
2004 sales $26.1 billion
2003 sales $20.9 billion
Ownership Carlson family, 100%
The daughter of Carlson Companies' founder Curt was neither expected, nor thought she wanted, to run the family business. The business has evolved over 70 years from a stamps outfit into a global hospitality empire including Radisson hotels and restaurant chain TGI Friday's, but today the CEO and chairman of one of America's largest private companies is never out of the most prestigious business magazine rankings for her success. Father Curt wasn't up for having a woman run his company and only mandated Marilyn to the job just months before his death in 1999, despite his daughter being a Carlson veteran and the clear front-runner in industry expertise terms. Despite the crippling challenges of SARS, Avian flu, global terrorism and industry consolidation, Carlson is in rude health having reported a 25% increase in sales for 2004. Marilyn's strategy has struck the balance between conservative and enterprising, which is why her company's financials beat that of closest rivals, family-controlled Marriott, Hyatt and Hilton. Next stop: Asia.
King of family entrepreneurs: Lakshmi Mittal, Mittal Steel
2004 sales $22.2 billion
2003 sales $9.6 billion
2004 share dividend $7.31
2003 share dividend $1.83
Share ownership Mittal family, 97%
They should rename Mittal Steel the Starship Enterprise. In 2004 the family-owned steel behemoth explored frontiers rarely touched by even the most successful businesses, when CEO Lakshmi brokered a $17.8 billion reverse merger with US rival ISG and merged it with his other Ispat and LNM holdings, blowing rivals like Arcelor and POSCO out of the water. Lakshmi's salary is not disclosed but with 97% of the company's shares held by the family, the pair raked in $260 million to feather the Mittal nest. 55-year old London-born Lakshmi has awards for entrepreneurialism coming at him from all sides, but perhaps his crowning glory is his son, the genuinely talented Aditya. The boy is no silver spoon inheritor: inaugurated into the company as head of mergers and acquisitions in 1997, aged just 20, his first move was to take Ispat to market, raising over $775 million and making the largest ever deal in the global steel industry at the time.
Drink to that: Richard Sands, Constellation Brands
2004 sales $4 billion
2003 sales $3.5 billion
2004 dividend $1.14
2003 dividend $0.98
Share ownership Sands family, 88%
Hunting down big brands to add to Constellation's nicely-stacked stable of thoroughbred wines is Constellation CEO Richard Sands' simple but effective growth strategy. Even if second family generation Sands' current $1.2 billion hostile bid for Canadian rival Vincor is successful, though, Constellation couldn't go that much higher than it is now, having become the world's largest wine company and the US' largest by dollar sales following 2004's snatch-up of family-owned winery, Robert Mondavi. But this is one family business that delights in making bodacious risks to dominate its market, and has both the capital, entrepreneurial flexibility and the reputation to follow through. Representatives at the Constellation press office prefer to play down the company's owner-manager status, stating that "we do not see ourselves as a family business." Sands is credited with turning his father's wine company into a diversified player in US beer imports and spirits.
Slow and sure: Warren Staley, Cargill Incorporated
2004 net earnings $1.33 billion
2003 net earnings $1.29 billion
Share ownership Cargill and McMillan families, 90%
Non-family CEO Warren Staley has kept agribusiness giant Cargill's fortunes on a steady upward trend since becoming the third non-family CEO in its 140-year history. The two founding families have never been afraid to hand control to a capable outsider, and their trust and independence of thought have been rewarded, since Cargill is one of America's most significant private companies. In seven years much about Cargill's core commodities trading markets has changed; the company has had to become expert in managing price global price volatilities and large dips in demand for key meat and grain products, due to consumer lifestyle U-turns and animal health scares. Under Staley's leadership, the company announced in September its intention to acquire Degussa's food ingredients operations. Staley has worked in most parts of the business across North and South America, and is regarded as a highly committed, enlightened manager. "I end up working Saturdays and Sundays sometimes because I have to put Cargill first," Staley says. "That's what I get paid to do."
Making the grade? Bill Ford, Ford Motor Company
2004 dividend $0.40
2003 dividend $0.40
2004 sales $89 billion
2003 sales $92.3 billion
Share ownership Ford family, 40%
Probably the only CEO ever to have chosen to work without a salary, 47-year old Bill Ford, great-great grandson of the auto giant's founder Henry, is the embodiment of the maxim, 'you get what you pay for'. Ford's fortunes go from bad to worse by the quarter – sluggish sales and rising costs, expensive product recalls, stiff market competition from the East and labour issues have made profit warnings the norm. Bill 'Clay' Ford Junior simply seems out of his depth. Even without pay Bill owns over $12 million in stock, so he's not short of a few bob, since the company still managed a $0.40 dividend last year. Having made a $155 million loss in 2004, the company has said it will fall well short of expectations for '05 profit. Bill reduced the company's crippling debt load with the $5.6 billion sale of rental outfit Hertz – but the company suffered subsequent credit rating downgrades to junk status by both Standard & Poor's and Fitch.
Stand and deliver: Sergio Marchionne & Luca di Montezemolo, Fiat
2004 dividend not paid
2003 dividend not paid
2004 revenues $1.14 billion
2003 revenues $0.98 billion
Share ownership Agnelli family, 30%
Bad luck seems to follow the Agnelli family around. The owners of autos giant Fiat lost patriarch Giovanni in 2003 to cancer and, last May, lost his successor and brother Umberto, also to cancer. The company has seen five CEOs in the last two years and hasn't paid a dividend since 2002. But things could change. Family friend and Ferrari CEO di Montezemolo, was made chairman only days after Umberto's death, and pledged that 2004 was the last year the company would report an operating loss.
Banking on Britain: Emilio Botin, Grupo Santander
2004 dividend $0.39
2003 dividend $0.32
2004 revenues $36 billion
2003 revenues $31.7 billion
Share ownership Botin family, 2%
Seventy-year old Grupo Santander chairman Botin propelled his banking outfit into the list of the world's top ten with 2004's $15 billion acquisition of UK high street bank Abbey. Though 'Spain's richest man' hardly has an unblemished business reputation – having been up on charges of misusing bank funds (cleared in April) and currently facing trial for fraudulent tax activities – Botin has ensured Santander has new markets to play with outside Spain.
Kiss and make up: Anil & Mukesh Ambani, Reliance Industries
2004 dividend $1.24
2003 dividend $0.84
2004 turnover $16.7 billion
2003 turnover $11.8 billion
Share ownership Ambani family, 2%
Reliance chairman Mukesh and younger brother Anil were able to end a family feud over who late father Dhirubhai wanted to run the business, when he died intestate in 2002. In June Kokilaben settled the matter by demerging Reliance's telecommunications, coal, gas and financial services businesses into two separate entities, separately overseen by the brothers and individually listed on the Mumbai Stock Exchange. Now both boys play nicely and shareholders are placated with healthy dividends.
The first lady: Guler Sabanci, Sabanci Holding
2004 dividend $0.42
2003 dividend $0.54
2004 revenues $8.6 billion
2003 sales $7.2 billion
Share ownership Sabanci family, 74.7%
Guler Sabanci took over leadership of her family's industrial conglomerate last year, making her Turkey's first ever female chairperson. Uncle Sakip, chief executive since 1967 and the man who brought Guler up, chose her as his successor over his brothers and their sons. Guler fared well in her first year, leaping from running Sabanci's tire operations to managing its $8.6 billion parent, buying out lucrative 50% stakes in joint ventures with DuPont and IBM, and readying the company for operating under European laws when Turkey gains admittance.