Tags: Kelly | Nelson | underrated | CEOs

Southwest CEO Kelly Tops Fortune's Most Underrated CEOs List

By    |   Wednesday, 29 April 2015 07:20 AM

Gary Kelly of Southwest Airlines tops Fortune's list of the five most underrated CEOs.

The top five have distinguished themselves by leading their companies to stellar growth while receiving modest compensation.

"Since Gary Kelly was appointed as CEO, Southwest has outperformed every one of its rivals: Jet Blue, United Continental, American Airlines, Virgin America, Delta. Kelly received a raise of only 25 percent in 2014, [according to Equilar,] despite delivering a total stockholder return of more than 126 percent," writes Fortune's Paul Hodgson.

Ronald Nelson of Avis Budget garnered a pay raise of 26 percent last year, dwarfed by total stockholder return of 64 percent and net income growth of 1,431 percent. In addition, return on capital totaled 6 percent. "Nelson is well compensated, but not excessively so, especially compared to his peers," Hodgson says.

The other three CEOs on the list are Bradley Tilden of Alaska Air Group, Thomas Richards of CDW Group and Larry Young of Dr. Pepper Snapple Group.

One top CEO who has had a rough time at the helm is General Electric's Jeff Immelt.

The prevailing take on GE's recent decision to jettison most of its GE Capital unit is that the division was a victim of its own excessive speculation during the 2008 financial crisis.

But Steve Forbes, editor-in-chief of Forbes Media, doesn't see it that way.

GE capital's fate represents "a damning indictment of both the Federal Reserve and bank regulators," he writes on Forbes.com.

"Together, they have damaged the functioning of credit markets and almost paralyzed bank lending, thereby severely hampering recovery from the economic crisis of 2008-09."

The issues aren't unique to GE Capital, Forbes says.

"The conventional wisdom posits that banks and financial behemoths such as GE Capital were suddenly possessed of an insatiable bout of greed several years ago and recklessly expanded their activities, which brought the world to the brink of economic cardiac arrest," he explains.

"Balderdash! That narrative has it backwards. Government blunders, not some sudden failure of free markets, brought on the crisis. As is all too typical in such situations, the blame fell on the private sector, and the genuinely guilty parties, such as the Federal Reserve, assumed more power."

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Gary Kelly of Southwest Airlines tops Fortune's list of the five most underrated CEOs.
Kelly, Nelson, underrated, CEOs
Wednesday, 29 April 2015 07:20 AM
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