Businessuite Magazine December 2012
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editorial The Top Ten CEO for 2012, as in previous years, are determined by the rate of growth of their respective companies over the previous year -measured by after tax profits. These companies have experienced an increase that range from a high of 216% in the case of the number one ranked CEO, Jeffery Hall of Jamaica Producers Group; to 15.8% in the case of the tenth placed JMMB boss Keith Duncan. The list reflects a wide range of CEOs in a variety of sectors including gaming, banking, finance and food and beverage. The fact is, what these companies all have in common is not what they do, but who does what. Excellence in performance is set from the person who wears the crown. As further reading of this issue will attest, heavy indeed is the head that wears the proverbial crown. We envy the salary, balk at the fancy title, and consider them tyrants who reign over an evil empire. Well maybe the last bit is a little bit of an exaggeration. The point is, being a CEO is for the most part a meritocracy fraught with as much pressure as there are perks. These professionals have gotten to where they are today by virtue of sheer knowledge, experience and hard work and therein lies the success stories. These are simply put, people who know their job and do it very well. They also perform against the backdrop of what is arguably the most difficult economic times locally and globally, for both consumers and business. In a contracting economy, the shrewd leader must steady the ship, instill confidence in his crew and chart a course for success.
Ranking
*’000
Company
1 Jamaica Producers Group 2 Supreme Ventures Limited 3 Pan-Jamaican Trust 4 Scotia Investment Jamaica Limited 5 Desnoes and Geddes Limited 6 Capital and Credit Financial Group 7 GraceKennedy Limited 8 Sagicor Life Jamaica 9 National Commercial Bank 10 Jamaica Money Market Brokers
Businessuite Magazine December 2012
We salute the repeat placements for their consistent high performance, the Hyltons and Halls of this list who provide an example of how to lead large, complex, dynamic organizations. Credit also to those new to the list. For making the arduous climb to join an elite club of managers and leaders in your field – we salute you. Success is not a singular act but a habit. We are what we repeatedly do. It is therefore fair to anticipate your presence in successive years. Congratulations to Anya M. Schnoor, this year’s number four placed CEO. Schnoor was promoted to country manager of the Trinidad arm of Scotiabank. Her performance is proof that success will indeed be rewarded in the business sector. At the same time we commend Ms. Schnoor, Businessuite laments the absence of female leaders in this year’s crop of leaders. We are certain, by virtue of the Top 50 women in business listing in the previous issue, that women are a force to be reckoned with in the business world. While 40 percent of the top ten CEOs on the Junior Stock exchange are women, just one percent of the persons in the main listing are women, just one in ten. We certainly look forward to seeing more women being given the opportunity to manage companies at the very top of their respective fields and show what they can do. The Numbers Here are the top 10 companies and a comparison of the after tax profits in 2011 to 2010 and the rate of change. To learn about the CEOs responsible for these impressive numbers, continue reading.
2011 after tax profits* 955,767
2010 after tax profits* 302,104
Percentage change 216.3
$ change* 653, 663
606, 326
421,267
43.93
185,059
1,758,990 1,985,092
1,244,498 1,487,348
41.34 33.47
514,492 497,744
1,015,690
789,398
28.67
226,292
364,132
287,674
26.58
76,458
2,992,473 5,754,467 13,034,429
2,396,256 4,871,467 11,074,798
24.88 18.13 17.69
596,217 883,000 1,959,631
1,142,930
986,378
15.87
156,552
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table of contents
Seasons Greetings!
Businessuite would like to thank all our readers, subscribers and advertisers for their support throughout the past year. We look forward to your continued support in 2013 as we embark on our most ambitious plan of action to date to better serve you. We Wish you a safe and happy holidays and a properous new year!!!
Feature Stories 28. Potential Pitfalls of a CEO
06. What’s in a title: The Job Description of a CEO
36. Top 10 CEOs on the Junior Stock Exchange
The CEO’s second duty is building culture. Work gets done through people, and people are profoundly affected by culture.
................................................................................................ 12. Optimism: The Key trait in a successful CEO? “The executives are a vastly different breed than the average person,” said International Business Professor Campbell Harvey.
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22. Getting it Done: How does a CEO Measure his or her own Performance?
39. The World’s Top 10 CEOs
.......................................................... 42. Techno-Logic: Tech Gadgets for the CEO on Top
Having vision isn’t enough. Communicating the vision is the key. When people ‘get it,’ they know how their daily job supports the vision.
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Businessuite Magazine December 2012
table of contents Counting Down The Top 10 CEOS In Jamaica for 2012 .......................................................................... #10 - Keith Duncan 07 : Building on a Legacy: Of the future and certainly the coming year, Group CEO Keith Duncan remarked, “For 20 years, JMMB has been setting standards of achievement.
.......................................................................... #9 - Patrick Hylton 09 : A Mainstay on the top 10 “while we are proud of our successes, our focus remains on reaching higher heights.
.......................................................................... #8 - Richard Byles 13: A Customer & Community Centric -CEO
“We will embark on initiatives to improve the convenience and efficiency with which customers can access our products and services,”
.......................................................................... #7 - Don Webby 15: The Value of Succession Planning: “We see these challenges as unique opportunities to grow to become the global consumer food group and regional financial network that we all envision.”
.......................................................................... #6 - Ryland Campbell 18: A Changing of the Guard
It is something of a changing of the guard as this stalwart of the financial sector sees his company taken over by another juggernaut in the financial sector.
.......................................................................... Businessuite Magazine December 2012
#5 - Alan Barnes & Renato Gonzalez 20: The Rotating door of Leadership “Red Stripe continues to make a significant difference in the communities they serve through the various programmes and projects of the D &G Foundation –
.......................................................................... #4 - Anya M. Schnoor 24 : A CEO Takes her Skills Abroad “She has over 17 years of experience in the areas of investments, financial services and banking.
.......................................................................... #3 - Stephan Facey 26: A Solid Investment “Shareholders’ equity as at December 31, 2011, was $28.29 billion, compared to $25.20 billion as at December 31, 2010 (12% increase).”
.......................................................................... #2 - Brian George 31: A Supreme Leader Cash Pot remains the top player in its lottery portfolio, as it represents 76.64% of total lottery revenue. Cash Pot increased by 12.31% when compared to the previous year of $16.798 billion, total sales being $18.866 billion.
.......................................................................... #1 - Jeffrey Hall 33: The chips Fall into Place
Nowhere is a company’s success more directly attributable to the strategic moves of its leadership than the Jamaica Producers Group Ltd.
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Feature
What’s in a title: The Job Description of a CEO The fact is most people feel a tinge of awe when someone has the CEO title. More importantly we are impressed by what comes along with that title: the power, the salary, and the chance to be “The Boss”. Indeed it is worthy of awe!
at the very top.
What is the CEO’s main duty? - setting strategy and vision. The senior management team can help develop strategy. Investors can approve a business plan. But the CEO ultimately sets the direction. Which Unfortunately not everyone who has markets will the company enter? this title is cut out for the job or even Against which competitors? With the ones who hold the title, it can be what product lines? How will the argued are not really good at what company differentiate itself? The they do. Some are not even aware of CEO decides, sets budgets, forms what the job entails and those who partnerships, and hires a team to do have a difficult time pulling it off. steer the company accordingly. So the question is therefore, what The CEO’s second duty is building really is the job of a CEO? culture. Work gets done through Probably more than with any other people, and people are profoundly job, the responsibilities of a CEO di- affected by culture. A lousy place to verge from the duties and the mea- work can drive away high performsurement. The fact is, quite simply ers. After all, they have their pick of the CEO is responsible for every- places to work. And a great place to thing, especially in a startup. The work can attract and retain the very CEO is responsible for the success best. or failure of the company. Operations, marketing, strategy, financ- Culture is built in several ways, and ing, creation of company culture, the CEO sets the tone. His or her evhuman resources, hiring, firing, ery action—or inaction—sends culcompliance with safety regulations, tural messages. Clothes send signals sales, PR, and the list goes on - it all about how formal the workplace is. Who he or she talks to signals who falls on his/her shoulders. is and isn’t important. How he or The CEO’s duties are what he or she she treats mistakes sends signals actually does, the responsibilities about risk-taking. Who he or she that are not delegated to someone fires, what is put up with, and what else. Some responsibilities should is rewarded shapes the culture pownot and cannot be delegated. Cre- erfully. ating culture, building the senior management team, strategic plan- Let’s say a project team worked ning, long term (and short term) weekends launching a multimedia goal-setting, indeed, the execution web site on a tight deadline. Their of certain function can only be done CEO was on holiday when the site 6
launched. He or she didn’t call to congratulate the team or get a last minute update. To the CEO, it was a matter of keeping his or her personal life sacred. To the team, it was a message that personal life was more important than the weekends and evenings they had put in to meet the deadline. Next time, they may not work quite so hard. The emotion and effect on the culture is very real, even if it wasn’t what the CEO intended. Congratulations from the CEO on a job well done can motivate a team like nothing else. Silence can demotivate just as quickly. Team-building is the CEO’s #3 duty. The CEO hires, fires, and leads the senior management team. They, in turn, hire, fire, and lead the rest of the organization. The CEO must be able to hire and fire non-performers. He or she must resolve differences between senior team members, and keep them working together in a common direction. The CEO sets direction by communicating the strategy and vision of where the company is going. Strategy sets a direction. With clear direction, the team can rally together and make it happen. If vision is where the company is going, values tell how the company gets there. Values outline acceptable behavior. The CEO conveys values through actions and reactions to others. Companies such as JMMB (who has the tenth ranked CEO on this list) are famous for the corpoBusinessuite Magazine December 2012
Feature rate values they espouse. JMMB continues to be guided by the principle ‘vision + values = phenomenal success.’ People take their cues about interpersonal values such as trust, honesty, openness, etc. from CEO and his or her actions as well.
money or don’t support the strategy. He or she considers carefully the company’s major expenditures, and manages the firm’s capital. If the company can’t use each dollar raised from investors to produce at least $1 of shareholder value, the CEO decides when to return money to the Capital allocation is the CEO’s #4 investors. Some CEOs don’t considduty. The CEO sets budgets within er themselves financial people, but the firm. He or she funds projects at the end of the day, it is their deciwhich support the strategy, and sions that determine the company’s ramps down projects which lose
#10 - Keith Duncan
financial fate. The management of these functions ultimately contribute to the failure or success of the company he or she manages. This is why the CEO’s duties require that he is responsible for all aspects of the business. This year’s Top 10 CEOs have made it here by no small feat. They have clearly managed their duties and responsibilities to the highest standard. BM<
Top 10 CEOS
Building on a Legacy:
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he Keith Ducan-run Jamaica Money Market Brokers Ltd. (JMMB) created one of the largest waves in the financial sector last year when it completed the purchase of 100 per cent of the shares in the Capital and Credit Financial Group at a price of $4.55 per share or $4.22 billion. This saw JMMB gaining CCFG’s Merchant Banking and Unit Trust Licences as well as its portfolio of loans, deposits and investments and repo portfolio. The Merchant Bank Licence will enable JMMB to offer services they have long sought to offer since they applied for a commercial bank licence back in 2008. The merchant bank licence is in fact a good substitute and permits them to offer credit card and debit card facilities. In addition, it opens up an avenue to get cheaper balance sheet funding while allowing them to expand their loan offerings.
Businessuite Magazine December 2012
An additional benefit of a JMMB/CCFG deal is that JMMB will be able to delve into the restricted unit trust market with CCFG’s three established products. This is in addition to JMMB’s two indexed funds which are both incorporated as companies in Cayman. The attractiveness of this business line is that it enables the company to deleverage its massive balance sheet in light of tighter capital requirements by the FSC. JMMB is the most leveraged of all players in its peer group. JMMB’s audited Financial reports for 2011 extend into the first quarter of 2012, with a reported Group operating profit of J$2.78 billion and net profit of J$2.24 billion for the year and a 96% increase compared to the previous year’s result. Shareholders’ equity increased from J$9.4 billion in the previous year to J$10.87 billion. Their achievements have been the direct result of a strategy focused on continued on page 8
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Top 10 CEOS business line diversification, expanded regional growth, the homeless. Their support for the Youth Upliftment operational excellence and exceptional client service Through Employment (Y.U.T.E.) programme continues not only with funding but by providing leadership in delivery. specific areas. All their business lines reported higher contributions to profits. The operations in the Dominican Republic Of the future and certainly the coming year, Group continue to grow with a client portfolio of US$80.71 CEO Keith Duncan remarked, “For 20 years, JMMB million and a strong base of retail and institutional cli- has been setting standards of achievement. Throughout ents, including Banks, Savings and Loans Associations, this time, we have been building for the future, a future Securities Dealers and Pension Funds. In Trinidad and which in our view has never held a greater measure of Tobago, their operations also posted satisfactory results. promise for those with a stake in our success.” He went on to say that JMMB Group’s future will encompass Their client base continues to grow and exceeds 190,000. growth, broader financial services offerings and profesThis is a testament to the trust and confidence that the sional and exceptional service delivery to the thousands Jamaican people and wider regional clients have placed of clients they serve. “We are committed to meeting and in the JMMB brand. During the year, they also deep- embracing the challenges ahead, as our team continues ened their presence in the Dominican Republic with to work together to maximize returns for all our sharethe addition of the Santiago Branch. As JMMB expands holders, stakeholders and investors.” throughout the region, they continue to dedicate ourselves to the company’s core values of honesty, integrity, Keith Duncan joined JMMB as Trading Manager in openness and love, and recognizing their prominent 1993 and in 2000, became the Deputy Managing Director. In 2005, he was promoted to Group Chief Executive role in sustaining their success. Officer and has responsibility for overall performance In May 2011, JMMB launched the Joan Duncan School and charting the strategic direction of the Group. As a of Entrepreneurship, Ethics and Leadership (JDSEEL) strategic thinker and visionary leader, he has built one at the University of Technology (UTECH), in memory of the strongest trading teams in Jamaica. His financial of its founder Joan Duncan. expertise has not only benefited the JMMB Group, but also the Jamaican financial sector. He is a former presiThe Company continued to diversify its offerings by dent of the Jamaica Securities Dealers Association and launching several new products, including the JMMB was involved in the partnership with the Financial SerCar Solution, JMMB Education Solution and JMMB vices Commission (FSC) in designing and implementDebt Consolidation Loan. JMMB Insurance Brokers ing new structures and models to enhance the effective(JMMB IB) launched the Smart Choice Home Insurness of Jamaica’s market players. ance product and continued with its JMMB Motor Smart Pak through partnerships with select insurance Known for his commitment to youth development, companies. Keith served as Chairman of the National Youth Service from 2003 to 2009 and worked closely with the respecPerhaps the thing that has always made JMMB unique, tive boards and teams to fulfill the mission of creating is their recognition that their clients are the cornerstone and reforming Jamaica’s youth to become purposeful of their success and as such they continue to deepen clicitizens. ent intimacy initiatives and implement new ones to ensure that they are provided with holistic financial solu- In continuing his service to Jamaica’s youth, he joined tions. They recognize that only by maintaining genuine efforts to design and implement the Youth Upliftment relationships and applying their financial expertise to Through Employment programme (Y.U.T.E), a private the solution of financial problems will they reap a win- sector led initiative, and now serves as a board member win solution for all. of the Y.U.T.E. Project. Keith holds a B.A. (Economics) from the University of Western Ontario in Canada and During the year JMMB provided continued support to is a Chartered Financial Analyst. organizations and groups in the areas of social transformation, sports, health, education and cultural events. His is a legacy that has been passed down from his In Jamaica, they continue to support the Committee mother, who founded the company some twenty years for the Upliftment of the Mentally Ill (CUMI), which ago, and now after the leadership of his sister, continues enhances standards of living for the mentally ill and to take the company to new heights. BM< 8
Businessuite Magazine December 2012
Top 10 CEOS
#9 - Patrick Hylton
A Mainstay on the top 10
T
here are very few CEOs that we can pencil into this list on a year to year basis. Such is the level of consistency of the NCB boss that he has become something of a fixture on this list and we assume will be for years to come, as long as he remains at the helm of the banking giant. Hylton is the only CEO to maintain a presence on the list every year since 2005. He peaked at #4 on the 2006 list and placed sixth last year.
appointed the Group Managing Director of NCB and since then he has led the organization to achieve record growth in profitability.
Complementing his strategic business acumen and an empathetic but firm leadership style, are his academic achievements as an Honours Graduate in Business Administration and as an Associate of the Chartered Institute of Bankers (ACIB) London. He is a Past President of the Jamaica Bankers Association and in ad“while we are proud of our successes, dition to being a Director of NCB, Mr. Hylour focus remains on reaching higher ton is the Chairman of heights. In this way, each of you can be Harmonisation Limited and sits on several confident that your financial fortunes boards including the Caribbean Informawill grow as NCB grows.” tion and Credit Rating Services (CariCRIS).
Patrick Hylton first received local and international acclaim when he was appointed a leading role by the Government in the rehabilitation of the Jamaican financial sector during the mid 1990s. The wealth of his experience in all facets of the financial services industry led to him being named the Managing Director of FINSAC for five (5) years, where he had responsibility for the re-structuring and divestment of intervened financial institutions and the acquired assets. His successful completion of that undertaking culminated in the national award of the Order of Distinction, Commander Class, being bestowed on him by the Prime Minister and Governor General of Jamaica in 2002. In 2002 he joined the island’s largest commercial bank, National Commercial Bank Jamaica Limited (NCB), as the Deputy Group Managing Director, where his responsibilities included the Bank’s investment and insurance subsidiaries. On December 1, 2004 Mr. Hylton was Businessuite Magazine December 2012
The National Commercial Bank, under the direction of Managing Director, Patrick Hylton, stands heads and shoulders above local banks. Chairman Michael LeeChin gushed about the track record that his company had established in the banking sector over the years, in his message to shareholder in the last annual report he said. “I invite you to join me in celebrating the fact that during the past year NCB continued to lead the local financial services sector by recording world-class performances in key areas of its operations. We welcomed the accolades that came from prestigious organizations such as “The Banker” magazine which recognized us not only in respect of our continued on page 11 9
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Businessuite Magazine December 2012
Top 10 CEOS outstanding performance regionally, but internation- due to reduced interest costs. Total operating expenses ally as well. Being named as one of the top performing increased by $354 million primarily due to the impairbanks in the world is a highly commendable achieve- men losses on securities booked for $264 million. ment!” Lee-Chin beamed. Their wealth management segment recorded operating Here is how the different segments of their business profits of $4.67 billion for the 2011 financial year, an inoperations performed over the year starting with the crease of $1.12 billion over the previous financial year. Consumer and SME segment which includes the Retail Included in this segment are stock brokerage services, Banking and SME and Payment Services operations of securities trading, investment management and other their business. This incorporates the provision of bank- financial services provided by overseas subsidiaries. ing services to individual and small and medium busi- This improved performance was driven by increased ness clients, money remittance services and card related net interest income and gains on investment activities. services. Operating profit reported for the segment was $3.22 billion which increased by $589 million or 22%. For the 2011 financial year, their insurance and pension Our external operating revenue increased by 13% or fund management segment achieved operating profits $1.73 billion over the 2010 financial year. Net interest of $2.39 billion, an increase of 20% or $406 million. income for the segment grew by $801 million or 8% to This segment incorporates the results of the life insur$10.24 billion mainly due to reduced interest costs. In- ance, pension and investment management services of terest income experienced an overall decline of 4% as the Group. Total operating income grew by $2.64 billion a result of reduction in loan yields; this was however or 87%. The main contributor to this improved perforpartially off-set by the 35% and 9% growth in the Retail mance was premium income which grew by $2.46 bilBanking loan and credit card receivables portfolios, re- lion over the prior year primarily due to increased inspectively. Total operating expenses of $7.86 billion in- come from annuity premiums. Total operating expenses creased by $500 million or 7%, and this increase in op- went up by $2.23 billion which was mainly attributable erating expenses was primarily as a result of increased to the large annuity contracts entered into in the 2011 technical consultancy costs associated with sales related financial year. initiatives undertaken during the year. Of the 2010/2011 financial year, Hylton said: “The Their Corporate Banking segment, which offers bank- growth in revenues and profitability of the organization ing services mainly to large corporate clients, generated has remained strong. We have maintained or achieved operating profits of $2.10 billion for the 2011 financial leading market share in key areas such as loans and year, representing a decline of $826 million or 28% from deposits, while maintaining a strong capital base and the 2010 financial year. The decrease is attributed to a strong liquidity. NCB was recognized by The Banker reduction in net interest income due to lower loan bal- Magazine as Bank of the Year – Jamaica and as one of ances, as well as a reduction in interest earning loans the top performing banks in the world. Our organizadue to a large loan being classified as non-performing tion ranked 3rd and 14th, respectively, in the world during the year. External revenue decreased by $1.26 among the contenders on returns on capital and return billion or 24%, and accounted for the $990 million re- on assets and number one for both metrics among Cenduction in net interest income. Net fee and commission tral American banks.” income grew by $151 million or 46% mainly due to inAmong the highlights for the financial empire, Hylton creased credit related fees. Total operating expenses inidentified: Leading the market in reducing interest rates creased by $45 million or 16%. in select product areas such as auto loans Their Treasury and Correspondent Banking segment • Reducing commitment fees, offering principal incorporates the Bank’s liquidity and investment manpayment moratoriums and providing up to 100% agement function, management of correspondent bank financing to make vehicle purchases more affordrelationships and relationships with other financial inable for customers stitutions as well as foreign currency dealing activities. This segment experienced growth in operating profits • Educating customers about the opportunity to of $1.01 billion or 30%, mainly as a result of increased reduce or eliminate banking fees by utilising Augains on foreign currency and investment activities. Net tomated Banking Machines (ABMs), Customer interest income grew by $316 million or 12% primarily Care Centre, Internet Banking site or their webBusinessuite Magazine December 2012
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Top 10 CEOS enabled mobile phones to conduct certain transactions. • Suspending dormant charges on local and foreign currency accounts
• Partnering with Women Business Owners of Jamaica Limited and the IDB to develop women owned businesses nationwide
In his closing message in the 2011 Annual Report, Hylton promised that “while we are proud of our successes, • Collaborating with ActionCOACH to provide our focus remains on reaching higher heights. In this training to over 40 small and medium enterprises way, each of you can be confident that your financial island-wide to help them build stronger business- fortunes will grow as NCB grows.” With that in view we es can be sure Mr. Hylton will again feature on next year’s list. BM<
Optimism: the Key trait in a successful CEO? Have you ever wondered what is the key characteristic that makes CEOs? Since it’s a position to which so many strive but few achieve, the answer must be an overwhelming yes! A new study by the Duke University’s Fuqua School of Business thinks it may have found the answer. The study reports that Chief Executive Officers, at least in the US, are more optimistic about life than members of the general population The study was conducted by Professors Manju Puri, Campbell Harvey and John Graham. The researchers analyzed 3,000 personality test responses to draw their conclusions. The completed results will be published in a paper called “Managerial Attitudes and Corporate Actions,” which will be published in an upcoming issue of the Journal of Financial Economics. The professors also found that the CEOs, besides being optimistic about life in general, were upbeat about the prospects of their businesses and were more willing to take risks than members of the general population. Those traits, in turn, influence companies’ financial policies and decisions, according to the paper. 12
According to the personality test results, 80% of CEOs are what the researchers dub “very optimistic” people. That compares with only 65% of chief financial officers who are presumably less optimistic than CEOs because they have to deal with the nitty gritty of companies’ finances. Though the paper doesn’t say what percentage of the lay people considers themselves optimistic, they note that the CEO and CFO numbers are well above the mean.
ing. A risk-tolerant CEO might initiate more mergers and acquisitions, for instance, according to the research. Adds John Graham, who is also a finance professor at Fuqua, risk-tolerant CEOs initiate more mergers and acquisitions because “they are more content to ‘roll the dice,’” on business deals.
The researchers also evaluated how CEO personality traits affect pay structure. The study looked at risk-taking versus non-risk-taking “The executives are a vastly dif- CEOs, and at CEOs who are patient ferent breed than the average per- and those who are impatient. Riskson,” said International Business taking CEOs are much more likely to be paid with a greater share of their Professor Campbell Harvey. package made up of stock, options The study also looked at how fi- and bonuses, and less in the form nance executives rate their CEOs. of salary. Also CEOs who are impa“Finance executives go so far as to tient tend to earn a greater share of say that their CEOs are more opti- their compensation in the form of mistic about almost everything in salary, than do patient CEOs. life,” says Finance Professor Puri, “even beyond their outlook on busi- The researchers concluded that it costs companies more to compenness prospects.” sate risk-averse CEOs because the The researchers also found that companies have to pay more in salcompanies tend to attract CEOs ary and go the extra mile to encourwho reflect a firm’s “personality,” in- age their chiefs to take on expensive cluding risk aversion and optimism. investment projects that have more In turn, company policies are close- risk. Ultimately, firms match their ly related to executives’ personality. CEOs’ personality traits in a way That includes traits like risk toler- that cuts the cost of incentive comance and outlook on future financ- pensation.BM< Businessuite Magazine December 2012
Top 10 CEOS
#8 - Richard Byles
T
A Customer & Community Centric -CEO
his year’s # 8 comes in two places higher than his 2008 tenth place debut. That’s nothing to look down on. After all, Byles only oversees a company that is known largely as one of the largest insurance companies in region. Though the largest, insurance is but one slice of the Sagicor pie. Sagior manages and is involved in Employee Benefits, investments, individual insurance, banking and property management.
investments portfolios for all Group Companies with the exception of the Pan Caribbean Financial Services.
The Individual Insurance Division provides individual clients with life and health insurance policies, individual pensions, investment opportunities, and other insurance related solutions through a wide range of products, and a large distribution network of Financial Advisors and Broker/Agency channels in Jamaica and the CayThe Employee Benefits Division provides group health, man Islands. life and personal accident insurance to institutional clients for their employees. The Division also provides On revenues of $14.5 billion, a profit contribution of $2.0 billion was generpension funds administraated by its employee tion services and annuity benefits division durproducts to corporate cli“We will embark on initiatives to iming 2011. Revenue was ents. The Division focuses 20% on prior year, on building financial securiprove the convenience and efficiency up helped by a large single ty programmes that balance with which customers can access our premium. The Division the needs of both employer and employees. Sagicor Life products and services, reduce wait times wrote $3.53 billion of new business during the Jamaica is the largest proin branches, introduce new products to year compared to $1.94 vider of these services in in 2010. By yearJamaica. provide additional financial protection billion end 2011, the Investoptions, and provide competitive in- ment Division managed Sagicor Investments exists to assist individual investors vestment propositions and improve our total assets of $146.25 billion on behalf of inin attaining their personal goals by allowing them to ability to meet the needs of each client dividual policyholders, insurance clients, follow their own investment through a Single Customer View..” group pension clients, annuiphilosophy by tailoring tants and shareholders. products to meet their goals The net profit produced and match their appetite for continued on page 14 risk. Sagicor manages the Businessuite Magazine December 2012
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Top 10 CEOS from individual insurance was $2.57 billion, up from $1.66 billion in 2010. These results were generated from revenues of $9.49 billion and $8.52 billion, respectively. During 2011, earned premium income was $8.32 billion, an increase of 12% over the 2010 amount of $7.40 billion. The Pan Caribbean Financial Services Group (PCFS Group) delivered very good results in 2011. After tax profits were $1.72 billion, an increase of 13% above the prior year’s $1.52 billion. These earnings were derived from revenues of $4.1 billion, up 10% from $3.71 billion in 2010. The book value of the PCFS Group’s shareholders’ equity at December 2011 was $11.96 billion. The return on average shareholders’ equity was 15%. Byles insisted that for 2011, his company made a strategic commitment to consistently deliver a world-class customer experience. A number of initiatives focused on lifting their service delivery and customer experience were implemented. To this end the CEO proudly reported that significant progress in this area to the tune of: Achieved 97% call answer rate at the new contact centre and 95% call resolution rate Improved health benefits processing turnaround time to 95% in 5 days Increased customer loyalty by 14% over prior year Said Byles “customer service excellence will remain our key strategic priority for 2012. We will embark on initiatives to improve the convenience and efficiency with which customers can access our products and services, reduce wait times in branches, introduce new products to provide additional financial protection options, and provide competitive investment propositions and improve our ability to meet the needs of each client through a Single Customer View.”
management performance, business strategy and risk management.” The CEO is as proud of his company’s socially responsibly programmes as he is of its financial performance. “We are proud of our nation-building efforts during the year. Sagicor continued its sponsorship of the JTA/Sagicor National Primary, All-age and Junior High Schools’ Athletics Championships. We also embarked on a Sagicor School Tour aimed at connecting with primary schools across the island to provide reading material, health checks and to share positive messages to help motivate and encourage these young citizens.” Since the launch, Sagicor volunteers have shared with 10,000 boys and girls in 22 schools and conducted over 2,200 health screenings. Richard Byles, has been the President and Chief Executive Officer of Sagicor Life Jamaica Ltd. (formerly, Life of Jamaica Limited (LOJ), a subsidiary of Sagicor Financial Corp., since March 2004. He served as the President and Chief Executive Officer of Pan Jamaican Investment Trust Limited (Pan Jam), from 1991 to February 2004, where he chaired the trading, banking and insurance subsidiaries, pursued a strategy of mergers, acquisition and divestments. ... He served as Vice President of the Private Sector Organisation of Jamaica and represents them on the country’s development council. Byles also serves as the Chairman of Red Stripe, the National Water Commission and Harmonization Limited, a Resort Development Company, owned by the Government of Jamaica. He serves as the Chairman of Desnoes and Geddes Ltd., Pan-Caribbean Financial Services Limited, LOJ Property Management, Sagicor Reinsurance Limited (Cayman) and Sagicor Insurance Managers (Cayman). He has been a Director of Air Jamaica Limited since January 14, 2008, Sagicor Life Jamaica Limited since 2004, RBA Limited, Pan Jamaican Investment Trust Ltd, Life of Jamaica Limited and Pan Jamaican Investment Limited. He also served as Member of Governance Committee at First Jamaica Investments Ltd. He has been a Director at Pan Caribbean Financial Services Limited since 1996.
In 2011 SJL assets grew 13% to $161 billion and the capital of SLJ improved by 12% to $28.3 billion after paying a dividend of $2.44 billion to their 8,312 shareholders. SLJ continues to exceed the risk-adjusted capital reByles holds a BSc. in Economics from the University of quired by their regulators. the West Indies. He holds a BSc in Economics and an Byles also expressed faith and confidence in his team MSc in National Development from the University of and their work under his leadership, noting that “the Bradford, England. Board of Directors and its various Committees met regularly and executed their responsibilities with diligence. Premium income represents about 90% of total revThey deliberated on matters of proper governance, enue. BM< 14
Businessuite Magazine December 2012
Top 10 CEOS
#7 - Don Webby
T
he success of the Don Wehby at GraceKennedy shows how important is it for leaders, especially those who have been successful over the long haul – to judiciously and calculatedly select his or her successor to take over the mantle of leadership.
The Value of Succession Planning:
b) GraceKennedy Financial Group: This comprises general insurance, insurance brokerage, commercial banking, securities, remittance, cambio and payment services businesses. GraceKennedy Financial Group operates primarily within the English-speaking Caribbean.
Don Wehby became Group Chief Executive Officer of c) Hardware and Lumber Limited: This is a publicly listed company on the GraceKennedy Limited on Jamaica Stock Exchange July 1, 2011. Prior to this engaged in the retail appointment, Wehby was Group Chief Operating Of- “We see these challenges as unique op- and wholesale of building materials, home ficer, a position he took up when he rejoined the com- portunities to grow to become the glob- improvement supplies, pany on October 5, 2009. al consumer food group and regional household items and agricultural products. The company Wehby man- financial network that we all envision.” Mr. Wehby first joined ages in no ordinary comGraceKennedy Ltd. in pany. GraceKennedy gen1995 as Group Finance erates revenue from diverse Manager. He was apoperations in over 60 countries across the world. Its operations are structured as pointed Deputy Finance Director in 1997 and in that same year was appointed to the Board of Directors follows: of GraceKennedy Ltd. The following year, he was apa) Grace Foods: This comprises production of various pointed Group Chief Financial Officer and in 1999 unfood items through manufacturing arms, the distribu- dertook the additional role of Chief Operating Officer tion of Grace owned brands internationally and domes- for the Financial Services Division. In addition, he was tically and the operation of retail outlets through their charged with the responsibility for leading the Group’s Hi-Lo Supermarket chain in Jamaica. The Group also local and international expansion especially as this remanufactures and distributes third party brands inter- lates to banking, investments and insurance services. nationally and domestically. Grace Foods operates in He has directed the listing of the company in Jamaica, Jamaica, the Caribbean, Central America, North Amer- Trinidad and Tobago, Barbados and the Eastern Caribica, Europe and Africa, while sourcing products from bean Securities Exchange sited in St. Kitts. Under his these locations and Asia. continued on page 16 leadership, GraceKenneBusinessuite Magazine December 2012
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Top 10 CEOS dy acquired 100% ownership of First Global Bank Ltd., now a wholly owned subsidiary of the Company. In December 2005, Mr. Wehby relinquished his role as Chief Operating Officer of the Financial Services Division to take on expanded responsibilities as Group Chief Financial Officer, which included heading a new Strategic Planning Unit. In 2006, following the reorganisation of GraceKennedy he was appointed Deputy Chief Executive Officer, GraceKennedy Ltd. and Chief Executive Officer, GK Investments.
and Honorary Treasurer. He also served on the board of directors of his alma mater St. Georgeâ&#x20AC;&#x2122;s College.
In September 2007, Mr. Wehby resigned from his positions at GraceKennedy Ltd. and its Board of Directors to serve for two years as Government Senator and Minister without Portfolio in the Ministry of Finance and the Public Service. Following his two-year stint in public service, he was reappointed to the Board of Directors of GraceKennedy Ltd. on his return to GraceKennedy on October 5, 2009.
Don Wehby echoed the sentiments of many of his counterparts on this list, making note of the challenges faced by his company as a result of external financial difficulties which reverberated across the world. However great leaders never use challenges as an excuse, but instead see them as one more hurdle to surmount.
A Fellow Chartered Accountant, Mr. Wehby gained his early auditing experience at Touche-Ross Thorburn. He holds both a Bachelor of Science (Hons.) and a Master of Science degree in Accounting from The University of the West Indies and has completed an Advanced Management College certificate course at Stanford University.
For the financial year ended December 31, 2011 the company reported net profit attributable to shareholdHis current professional affiliations include Chairman ers of $2.75 billion, an increase of 22.2% compared with of the Taskforce on Tourism Contribution and Link- the prior year. This was derived from revenue of $58.2 ages. He is also Vice-President of the Private Sector Or- billion, which, compared with prior year, grew by 5.2%. ganization of Jamaica (PSOJ). He previously served the Earnings per share increased by $1.50 to total $8.33. PSOJ as a member of its Economic Policy Committee Supporting this revenue growth were assets of $100.2 continued on page 17 billion, representing a
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Businessuite Magazine December 2012
Top 10 CEOS growth of 2% for the year. Financing these assets were liabilities of $69.6 billion, which declined 1%; and capital of $30.6 billion, exhibiting growth of 10%. Capital comprises shareholders’ equity of $29.3 billion and noncontrolling interest of $1.3 billion. Return on equity for 2011 was 9.8% compared to 8.9% for 2010.
management and revenue growth in major markets.
In summing up 2011, Wehby said “Natural disasters and political unrest in many parts of the world created external shocks which reverberated across all markets. Through a combination of centering on customers’ needs, frugal management of expenses, and increased The Group’s revenue growth was primarily driven by risk management processes, has produced creditable rethe Grace Foods division with growth of 11%. This sults for the year. We are pleased to report that all busirepresented the major contributor to growth in over- ness segments showed improved performances over the all revenue. The Insurance and Financial Services seg- prior year. This was achieved through effective leaderments saw a decline of 11% and 12% respectively. Ex- ship by your management team and the work of our penses grew 4%, primarily due to staff costs, inventory committed employees.” costs and occupancy. The growth in staff costs was due to salary increases and higher than prior year incentive This year’s seventh place CEO is just as positive about payments, which, given the performance based nature the outlook for 2012 based on the confidence he has of the incentives scheme, were associated with the im- in his own management and that of his team. “We anproved performance during the year. Non Operating ticipate that, regardless of the challenges that may arise (Expense)/Income comprised finance cost, finance in- in 2012, your company has a competent team and the come and share of profits in associated companies. The infrastructural base to successfully navigate them. We Group’s finance cost declined by 25% due to lower bor- see these challenges as unique opportunities to grow to rowings and favourable terms on existing loans. The become the global consumer food group and regional Group’s share of profits from associates rose 48%. The financial network that we all envision.” BM< Group saw improved operating margins overall and on all business lines. This was a result of better expense
Businessuite Magazine December 2012
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Top 10 CEOS
#6 - Ryland Campbell
A Changing of the Guard
T
he most highly publicized occurrence for the Capital and Credit Financial Group during 2011 is not its 27% increase in profitability over last year, but the fact that the company helmed by the #6 placed CEO was sold to the Jamaica Money Market Brokers (JMMB). But a closer look at the numbers will show that the CCFG faired incredibly well in a difficult and dynamic financial environment.
commenting on the Company’s performance, noted that “the Group’s Cost Containment strategy achieved its objective, as there was a 6% decline in Non-Interest Expenses in 2011, amounting to approximately $1.2 billion, compared to $1.3 billion in 2010.”
The Group Chairman also attributed Capital and Credit’s positive performance to the 59%, increase recorded in Total Other Operating Income, of approximately $805 The Capital and Credit Financial Group (CCFG) re- million, from approximately $507 million achieved in corded a 27% increase in Profit after Tax for the finan- 2010. The Merchant Bank Group achieved an almost cial year ended December 31, 2011. This is an increase similar increase of 58% for its Total Other Operating Income, moving to just to just over $364 million, over $651million, from up from the approxiapproximately $412 milmately $288 million reThe Capital and Credit Financial Group’s lion in 2010. ported for 2010. CCFG’s achievement comes on Total Stockholders’ Equity in 2011 in- Another significant the heels of its 18th Ancreased by 4% to just under $7 billion, achievement for CCFG niversary milestone in a 170% growth in January this year and ceover the $6.7 billion achieved in 2010. was Securities Trading in ments the Organization’s 2011, moving to just consistent performance over $529 million, up in profitability, quarter from approximately over quarter, since in$196 million in 2010 and a 10% increase in Foreign ception. Exchange Trading, which moved from $89.6 million The Capital and Credit Merchant Bank (CCMB) Group reported in 2010, to just over $98 million for the 2011 also made achievements in the year under review. The reporting period. Banking Group recorded a modest increase in profit of approximately $2.2 million after Tax of just over $346 As it relates to the Capital and Credit Merchant Bank, the Bank’s CEO Curtis Martin, noted that the major million, up from the $344 million reported for 2010. contributor to the increase in Profit for the CCMB was CCFG’s Chairman and CEO Ryland T. Campbell, in the 124% growth due to gains in Securities sold for the 18
Businessuite Magazine December 2012
Top 10 CEOS
“It is something of a changing of the guard as this stalwart of the financial sector sees his company taken over by another juggernaut in the financial sector. ”
Merchant Bank Limited and six other subsidiaries. He is a Director of other private companies including CARI-MED Limited, which is the largest Pharmaceutical Distributor in the Caribbean; Kirk Distributors Ltd and also the Founder and CEO of Weststar Group of Companies, which are the major shareholders in the Capital and Credit Financial Group Limited. Campbell, who won the Jamaica Observer Business Leader Award for 2005, has been referred to as “The Steady Hand,” for his role in safely steering a small, indigenous bank through Jamaica’s most turbulent financial sector crisis and for guiding its transformation into a highly capitalized and profitable publicly traded company.
Campbell’s formal education began at Teacher Jamieson’s Infant School, then on to Carmel Primary School and by private study, before entering the Mico in 1962 for a three years course of studies and leadership preparation. At the Mico, Mr. Campbell became House Capyear of approximately $434 million, up from approxi- tain, Assistant Scout Master, Member of the Male Voice Choir and a Member of the Mico College Volleyball mately $193 million in 2010. team. According to Mr. Martin, “there was also a significant reduction in CCMB’s Loan Loss Provision, moving to Campbell’s passion for education as a transformational a net recovery of just over $13 million as at December tool for a country and the means of social and economic 2011, from the negative position of approximately $80 mobility especially for individuals from challenging circumstances mirrors his own journey from Carmel in million in 2010.” earning a Teacher’s Diploma from The Mico University He stated further, that notwithstanding the adverse im- College. As well as, a Certificate in Management Studpact that current economic conditions are having on ies from the University of the West Indies and through loan customers in the Banking sector, CCMB has been Distance Education, a Bachelors Degree in Business able to stabilise its level of past-due loans and expects Administration from Columbia State University. significant recoveries as it continues its efforts to reguCampbell serves as Deputy Pro-Chancellor and Vice larise these loans and expedite collections. Chairman of the Board of The Mico University College; The Capital and Credit Financial Group’s Total Stock- Member and Deputy Chairman of the Council of the holders’ Equity in 2011 increased by 4% to just under $7 University of Technology, Commissioner of the Early billion, over the $6.7 billion achieved in 2010. Childhood Education Commission and Adviser to the Council of The Jamaica Association on Intellectual DisRyland Theophilus Campbell or RT as he is affectionabilities. ately called by his close friends and family, has lead CCFG since inception. Campbell is a distinguished It is something of a changing of the guard as this stalteacher, banker, entrepreneur, philanthropist, com- wart of the financial sector sees his company taken over munity service leader and a passionate cultural devel- by another juggernaut in the financial sector. He can opment facilitator. He is best known as the Chairman, forever be proud of the company he built and led for so Group President and CEO, as well as co-founder of the many years and its performance in its last year as an inCapital and Credit Financial Group Limited, an invest- dependent entity, a performance that sees him placing ment holding company comprising Capital and Credit sixth on this prominent list. BM< Businessuite Magazine December 2012
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Top 10 CEOS
#5 - Alan Barnes & Renato Gonzalez
The Rotating door of Leadership
U
nlike the other companies on this list, the #5 placement must be shared by two CEOs. Desnoes and Geddes Ltd (D&G) was led by Mr. Alan Barnes, Managing Director of the company which trades as Red Stripe, and replaced upon his resignation effective July 1 by Mr. Renato Gonzalez, a Brazilian national, who is a seasoned Diageo leader with vast experience in manufacturing and a sterling leadership record.
novation, marketing and general management in businesses in thirty-one countries throughout Europe and Africa. Alan was previously on the boards of Sierra Leone Breweries Ltd., Phoenix Beverage Ltd. (Mauritius), C.M.M.U.D.V (Reunion) and Seychelles Breweries Ltd. He has represented the private sector on government para-statal boards covering the Environment and Waste Management in Seychelles. He has a Bachelor of Arts with Honours degree in Economics from the University of Nottingham, England.
Desnoes and Geddes Ltd (D&G) Renato Gonzalez also has which trades under the Red Stripe “Red Stripe continues to make a signifi- twenty years experience in the consumer goods market in name, is the manucant difference in the communities they large multinationals across the facturer of a range of premium alcohol serve through the various programmes world. He has a wide range of in supply chain brands, spanning and projects of the D &G Foundation – experience management having designed beers, stouts and and successfully implemented other beverages. procedures and processes. Prior They also market and distribute a collection of internationally renowned to his appointment, he was the Customer Operations premium spirit brands from their parent company Dia- Director of Diageo’s Global Supply Chain based in Amgeo plc, the world’s foremost premium drinks compa- sterdam. He was responsible for order management ny. Diageo is listed both on the London and New York and supply planning of Diageo’s number one brands and export from multi-plants worldwide. While he was Stock Exchanges. Supply Chain Director for Diageo, Mexico he received On July 1, 2009 Barnes took control of Diageo’s in- two leadership awards for excellence in execution and terests in the Northern Latin America and Caribbean inspirational leader. He has a degree from the Universizone. Coincidentally, in major restructuring months dade de Cidade, Rio de Janiero, Brazil and speaks fluent before the leadership shakeup, Jamaica had added to the Portuguese and Spanish. NorthLAC Zone. D&G earned after-tax profits in 2011 of over $1 bilAlan Barnes has twenty years experience in the alco- lion million reflecting an increase of 26.6%. Trading hol beverage industry and has worked across sales, in20
Businessuite Magazine December 2012
Top 10 CEOS profit was $1,423 million, a 36% year-on-year increase, primarily driven by reductions in sales and marketing costs. Cost of sales reduced by $332 million or 5% when compared with last year. In July 2010 a restructuring was implemented in the Supply function to help right size the business in light of the volume reduction. This, coupled with additional production and distribution efficiency initiatives helped deliver the decrease in the cost of sales. Procurement savings were also supported by the revaluation of the Jamaican dollar. The gross profit margin improved by 3 percentage points on last year to 31%. The total marketing cost was $1,484 million (2010: $1,499 million), of this amount $832 million was spent in the domestic segment as they continued to invest behind their core brands. Red Stripe continues to make a significant difference in the communities they serve through the various programmes and projects of the D &G Foundation – Diageo Learning for Life projects and the Red Stripe Employees: Advocates of Care and Hope (REACH). Through the Red Stripe Employees Advocates of Care and Hope (REACH) and the Diageo Learning for Life (DL4L) programmes, Red Stripe continued its rich legacy of supporting long-term sustainable initiatives in its communities. DL4L programmes moved from impacting 80 lives in 2010 to graduating 1,234 students this year. In addition to the graduates, an additional 469 students were enrolled in the programme at the end of May bringing to 1,705 the number of at-risk young people in depressed communities islandwide enrolled in 2011 alone.
According to Gonzalez, “we enter the new financial year with increased drive and optimism, which we have branded as “The Year of the Beer”. During this year our major focus will be on transformation of our business through three main areas: (i) Brand Value Creation; (ii) End-to-End Efficiencies; and (iii) Profitable Export Growth. Brand Value Creation – We will revive the Red Stripe brand through an aggressive media advertising campaign, major sponsorships, and an increased focus on activations and visibility in our communities. End-to-End Efficiencies will see us further reducing operational costs. The funds saved from this cost reduction will be reinvested in our brands. We will also continue to focus on equalization of the taxes on alcohol beverages, and will be seeking alternatives to be more cost competitive in the Caribbean. Profitable Export Growth – We will be reviewing our US export model and strengthening our export partnerships across different major beer players in the UK, Germany, and Brazil while seeking other major opportunities to enhance our brand penetration. This new focus will ensure that we have a stronger more profitable business in 2012, with an even stronger international brand.” Interestingly enough, in August 2012, Red announced that it would change leadership for the third time in three years, following the appointment of Cedric Blair as head of the beer manufacturer. Blair, the then supply chain director at Red Stripe, took over as in September as general manager of the brewing giant from Renato Gonzalez, who returned to his native Brazil to lead newly acquired Diageo company Ypioca. We wait to see if Blair can follow other Red Stripe CEOs before him in recent years, to a place on this list. BM<
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Feature
Getting it Done: How does a CEO Measure his or her own Performance? In the article ‘What’s in a title: The may stall a promising career or lead Job Description of a CEO,’ we looked to some kind of victimization. Even at the duties and responsibilities of when a company uses 360-degree the CEO. But while knowing the feedback, no one penalizes the CEO job description is a good first step if he or she doesn’t act on the feedfor a CEO, he or she must of acutely back. aware of his or her own performance and design a mea“Having vision isn’t enough. Comsurement system of municating the vision is the key. that performance – ultimately for his or When people ‘get it,’ they know how her own good and that of the company. their daily job supports the vision.”
at share price and company strategy. They are rarely interested in (or qualified to comment on) - the CEO’s daily behavior.
But the CEO’s daily behavior will make or break the company. The CEO’s duties don’t change because they are unmeasured. Indeed, lax measurement makes it easy for the CEO to feel confident, even when he or she shouldn’t. Good feedback is the only way to know what’s working, but share price simply won’t do it. External measures measure the company, not Unlike lower-level the link between the CEO’s acjobs, no one tells tions. A low share price tells that the Chief Executive how he/she is doing. Do managers The Board of Directors supposedly something’s wrong, but it doesn’t let the CEO know he or she is mak- oversees the CEO, but they are far help figure out what that is. ing poor decisions, or communicat- removed from day-to-day actions of measuring performance ing poorly? Not likely. Even when a the CEO and activities of the com- By CEO asks for honest feedback, the pany. Over time, they can evaluate based on duties, a CEO can fear is that non-flattering feedback performance, but they look mainly continued on page 24 22
Businessuite Magazine December 2012
Feature learn to do his or her job better. As explained in the previous article, the CEO’s job is setting strategy and vision, building culture, leading the senior team, and allocating capital. The last of these is easy to measure. The first three are more of a challenge.
talent at below-market prices, you can be sure the culture plays a large role. If people leave (especially top performers), again - look to culture. And don’t underestimate the power of walking around and examining the expression on people’s faces. If people are having fun, it will show.
Having vision isn’t enough. Communicating the vision is the key. When people ‘get it,’ they know how their daily job supports the vision. If they can’t link their job to the vision, that tells a CEO that his or her communication is faulty, or she hasn’t managed to turn the vision into actual tasks. Either way, a CEO can monitor his or her success as a visionary by questioning and listening for employees to link their jobs with the company vision.
The CEO’s success at team-building can often be measured through the team. Teams usually know when they’re effective. They can also rate their team using assessments that measure specific behaviors. For example, “I can trust my teammates.” “My teammates deliver their part of the project on time.” “Every member knows what is expected of them.” Regular team self-assessments can help the CEO track the team’s progress and hone his or her abilities to keep the team running smoothly.
Culture building is subtle; the culture a CEO sees may be very different from the culture of the rankand-file. Surveys about openness, values, and morale can be used to develop a measure of culture. There are books and websites that offer great questionnaires for measuring overall culture. Also, check turnover. When 95% of a workforce says they can’t wait to get to work, something is going right. If people rarely leave, and if it’s easy to attract top
Easiest to measure is a CEO’s capital allocation skill. In fact, financial measures are the ones made public: earnings and share price. But how can a CEO link those to her actual decisions? Working with the CFO, a CEO can devise financial measures appropriate to the business. Sometimes traditional measures are most appropriate, such as economic value added or return on assets. Other times, the CEO may want to invent
business-specific measures, such as return on training dollars, for a company which values state-of-theart training for employees. By monitoring several such measures, a CEO learns to link budget decisions with company outcomes In startups, earnings begin low to nonexistent, and share price is more about salesmanship and vision than earnings. So the CEO gets almost no useful feedback about her capital allocation wisdom. He or she doesn’t know whether a dollar spent on a slightly nicer-than-necessary copy machine is wasted or is a wise investment in a long-term. Careful attention to the design and tracking of financial measures can help prepare for the transition to an earningsdriven company. As we again examine the Top 10 list for this year, while it is clear that all have exceeded and excelled as far as financial performance, one can only assume that these CEOs have also excelled in the other areas such as team building and vision setting which has undoubtedly contributed to the success of their respective companies. BM<
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Top 10 CEOS
#4 - Anya M. Schnoor
A CEO Takes her Skills Abroad
I
t is pretty much certain that this year’s #4 ranked CEO will not make a return to next year’s list. Not because of some precipitous slide in performance or expectations. On the contrary, it is expected that this high achiever will continue to achieve at a very high level. However, this CEO will be making a move that will see her ineligible for this listing.
RBC Royal Bank Jamaica.
Of her involvement with the banking giant, Schnoor said when she first set foot in the banking institution, she never saw this day coming. However, she knew that Scotiabank was a place one aspired to be because “it was the biggest bank; the best bank, the bank that had been around the longest and the bank that had done the most Schnoor took over the country operations of Scotia- to Jamaica and the one that had played the most imporbank, but not in Jamaica. Instead, she replaced Rich- tant role in the country’s development”. ard Young as head of Scotiabank Trinidad and Tobago Prior to taking up the posiLimited, when Young tion, she underwent intense retired on October 31, 2011. “Her extensive “She has over 17 years of experience in training in Canada. At the time, here’s what she had to background in wealth management and in- the areas of investments, financial ser- say: “I have been focused on surance combined with vices and banking. She served as Gen- the wealth management and insurance sides of the bank her strong leadership but my superiors now want eral Manager of Eagle Unit Trust.” skills will serve her well me to learn more about the as head of Scotiabank retail, corporate and comTrinidad and Tobago,” mercial banking aspects of read a statement from the business, so those will be my main areas of focus for the Scotia Group read in regard to her promotion. training in Toronto.” In fact, as the transition to her promotion neared, there was some amount of market chatter that she was head- Ms. Schnoor served as Chief Executive Officer of Scotia ed back home to take over from Bruce Bowen, head of Investments Jamaica Ltd. (formerly, Dehring Bunting & Scotia Bank in Jamaica. The bank however refuted that Golding Ltd.) from July 1, 2007 to November 1, 2011. She served as Executive Vice President of Wealth Mansuspicion, stating that no succession was imminent. agement and Insurance at Scotia Group Jamaica Ltd. The market has long expected that Schnoor would run since February 2010, where she was responsible for the Scotia Group some day, especially after former heir ap- Group’s Wealth Management Division which includes parent Minna Israel jumped ship to take over the coun- Scotia Insurance, the provider of ScotiaMINT, Scotia try operations of rival RBTT Jamaica, now rebranded Private Client Group and the newly acquired invest24
Businessuite Magazine December 2012
Top 10 CEOS
“Scotia Investments reported that for the financial year ended October 31, 2011. Net income for the year amounted to $1.985 billion representing an increase of $498 million or 33.5% over the $1.487 billion that was reported for last year. The increase year over year is due to improved non-interest revenue and lower taxation charges. Net income pre-tax was $2.647 billion up $203 million from the previous year.”
sents the investment arm of the Group. Scotia Investments currently offers the widest array of investment products and services in Jamaica which includes: money market investment products, unit trust and mutual funds, stockbrokerage and equity trading services, pension and asset management and cambio services. Scotia Investments is also an authorized primary dealer, through which the Bank of Jamaica (BOJ) conducts its open market trading operations. They have five branches islandwide and Investment Advisors positioned in 26 Scotiabank locations. An integral area of Scotia Investments is their cadre of talented, experienced and motivated professionals, who deliver the firm’s menu of products and services based on comprehensive training. It should be very interest to see how Scotia Investments new CEO Lissant Mitchell, places on the next year’s list. From all indication he is already off to a flying start. The company reported a 15 per cent increase in secondquarter net profit to $536 million, boosted by operational efficiencies and growth in non-interest income. The wealth management arm of Scotiabank Jamaica posted total revenues of $1.06 billion for the threemonth period ending April 2012, seven per cent more than the 2011 second quarter.
Scotia Investments reported that for the financial ment company. She served as Senior Vice President of year ended October 31, 2011. Net income for the year Wealth Management and Investments at Scotia Jamaica amounted to $1.985 billion representing an increase of Life Insurance Co. Ltd. $498 million or 33.5% over the $1.487 billion that was reported for last year. The increase year over year is due She has over 17 years of experience in the areas of into improved non-interest revenue and lower taxation vestments, financial services and banking. She served as charges. Net income pre-tax was $2.647 billion up $203 General Manager of Eagle Unit Trust. She served as the million from the previous year. Net income for the fiChief Operating Officer and Senior Vice President at nal quarter amounted to $577 million, up $102 million Pan-Caribbean Financial Services Ltd. and was responor 21% above the $475 million earned in the previous sible for its operational functions, marketing, branch quarter. Earnings per share (EPS) for the year was $4.69 distribution and technology. compared to $3.51 for last year. The company’s return She is actively involved in the financial services com- on average equity (ROE) stood at 20.39% at the end of munity. She served as the President of the Primary the financial year versus 17.64% for the previous year. Dealers Association. She serves on the board of Heart In commenting on the results, new CEO Lissant MitchTrust NTA. Ms. Schnoor is a Member of the HEART/ ell stated, “We have produced another solid perforNTA Finance Committee. In terms of her training, she mance for this financial year. I am especially pleased holds an MBA from Barry University and a BA in Figiven that our results were achieved in a challenging nance and International Business from Florida Internaeconomic climate. We continue to streamline the optional University. erations of the company to reflect market realities and Scotia Investments Jamaica Ltd. is a subsidiary of Scotia ultimately diversify away from reliance on net interest Group Jamaica Limited (Scotiabank Group) and repre- income. BM< Businessuite Magazine December 2012
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Top 10 CEOS
#3 - Stephen Facey
A Solid Investment
H
ow many CEOs can successfully, over time, manage a diverse portfolio of entities that include, investment, insurance, banking, property management – development and rental of commercial property, retail hardware, coffee production and foods. This is what makes this year’s number three ranked CEO, Stephen Facey so special. Facey was ranked number 8 on the 2009 listing. Facey makes a stellar return to the list at number 3.
ited. An Architect by training, he is also a Director of the Jamaica Developers Association and a member of the Jamaican Institute of Architects.
Pan Jamaican Investment Trust reported that for the year ended December 31, 2011, net profit attributable to equity holders was $1,759 million, compared to $1,244 million in the previous year, a 41% increase, while basic earnings per stock unit of $9.37 for 2011 compared to the 2010 level of $7.27. Pan Jamaican Investment Trust’s balance sheet was also quite strong, with total assets Mr. Stephen Facey is President and Chief Execu- amounting to $15.9 billion, up 5% on the $15.2 billion tive Officer of Pan-Jamaica Investment Trust Limited. at December 31 2010. Stockholders’ equity increased Pan-Jamaican Investment Trust Limited (Pan Jam) is by 38% to $14.6 billion (2010: $10.6 billion), which a multi-faceted holding equates to a book value corporation that owns and per stock unit $68.68 as operates businesses across at December 31, 2011 a range of industries. Pan “Shareholders’ equity as at December (2010: $61.98). Jam ranks among the larg- 31, 2011, was $28.29 billion, compared est publicly listed comFor 2011, Pan Jam propto $25.20 billion as at December 31, erties enjoyed overall panies in the Caribbean. Through their subsidiaries occupancy levels aver2010 (12% increase).” and associated companies, aging 98% for the year. they engage in property Property income indevelopment and managecreased $121 million, ment, banking, manufacturing, retail, trade, financial 10%, to $1,370 million, which more than offset the 22% services and investment. increase in property operating costs experienced. This was attributable to increases in energy costs as world A graduate of Rice University and University of Penn- oil prices continued to escalate, as well as inflationary sylvania, Mr. Facey brings over 30 years experience to increases in other expense categories. Facey believes his current position. He is a Director of Sagicor Life Ja- that holding the majority of its investment securities in maica Limited, Hardware and Lumber Limited, Pana- foreign currency continues to be the most effective mecea Insurance Company Limited, New Kingston Civic dium and long-term value-maximizing strategy for its Association and Kingston Restoration Company Lim- stockholders. 26
Businessuite Magazine December 2012
Top 10 CEOS “We will continue to manage our risks prudently, and keep operating expenses in line with revenues. We continue to believe that, regardless of the challenges, opportunities will be prevalent both in Jamaica and overseas. We will be focused on taking advantage of these opportunities as appropriate when they present themselves.” Pan Jam holds 24.81% shareholding in Sagicor Life Jamaica Limited (SLJ). SLJ once again performed above Pan Jam’s own expectations, growing profits for the tenth consecutive year, despite the challenging environment in which it operates. SLJ’s net profit attributable to shareholders amounted to $5.52 billion, an increase of 18% over the previous year, representing a 21% return on average Stockholders’ Equity, while basic earnings per stock unit were $1.47 up from $1.24 for the same period in 2010. These good results were driven, in the main, by strong insurance and annuities new business; improved conservation of business in-force; insurance benefit experience which has been generally favorable; controlled operating costs and some expenses not recurring at the same level as in 2010. In addition SLJ’s
85% ownership of Pan Caribbean Financial Services Limited (PCFS), generated after tax profits of $1.72 billion, an increase of 13% above the prior year, despite the lower interest rate environment. Shareholders’ equity as at December 31, 2011, was $28.29 billion, compared to $25.20 billion as at December 31, 2010 (12% increase). During the year, the SLJ Board of Directors declared interim dividend distributions of $2.44 billion to stockholders or dividends per stock unit of 65 cents. Pan Jam’s share of profits from the operations of the new Walkerswood Group was $12 million in 2011. The group continues to build new and existing markets while attempting to satisfy customer demand. In the 4th quarter of 2011, Facey and his company made a shrewd business move by partnering with Jamaica Producers Group in the acquisition of The Mavis Bank Coffee Factory Limited along with its Jablum brand. Mavis Bank is the country’s premier processor and seller of Jamaica Blue Mountain coffee. Of the move, the CEO says “we are confident that together we can be successful in building on the world class status of Jamaica Blue Mountain coffee.” In his outlook, Facey made a pledge to his stakeholders and shareholders that if kept, and based on the type of wisdom that the #3 placed CEO has showed over the years, we are likely to see him back on this list next year, “We will continue to manage our risks prudently, and keep operating expenses in line with revenues. We continue to believe that, regardless of the challenges, opportunities will be prevalent both in Jamaica and overseas. We will be focused on taking advantage of these opportunities as appropriate when they present themselves.” BM<
“We have moved away from traditional advertising to compelling conversations and experiences between Brands and consumers.
Contact us at: 1-876-631-5418 (P & F) I 1-876-280-9192 (M) I amkcommunications@gmail.com CLICK is owned and operated by AMK Communications Limited
Businessuite Magazine December 2012
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Feature
Potential Pitfalls of a CEO Ask any CEO on the Top 10 CEO list, and they will tell you being a CEO is far from an easy job. The duties and role of a CEO, though glitzy and glamorous from the outside looking in, can present its own share of pitfalls. It’s said that power corrupts, and few positions are more powerful than CEO. While it is indeed the ultimate in power, the position can take a very large human toll on anyone who manages to find him or herself in that position. It’s all too easy for the CEO to become, to his/her subordinates anyway ….well, something that can’t be printed here. Most of the time that can be a matter of perception as well as reality. The CEO can soon forget - if they ever knew - what it was like to have a boss. They are free to ignore feedback that they don’t want to hear, and no one will call them 28
to task for it. They can bypass the chain of command when they want to meddle. They can give themselves raises and genuinely believe they deserve it. And most dreadfully, they can forget what it is like to be “one of the little people”: Listed here are some, not all, potential pitfalls of the CEO.
a CEO might declare. A nice excuse, but isn’t it the CEO’s job to anticipate the market and position the company for success under a variety of scenarios? Without someone to keep him or her honest, the CEO can gradually absolve him or herself of all responsibility. Believing in a title can lead to overconfidence
A CEO can become arrogant by Arrogance also threatens a CEO. blaming others “Because I am CEO, I must know Having no day-to-day accountabil- the business better than anyone ity for his or her actions can also else.” It has been said, but it just isn’t turn a CEO sour. When things go true. No CEO can be an expert in all wrong, the tendency is to blame ev- functional areas. If he or she knows eryone around without facing their the details better than her employown shortcomings. “My employees ees, she’s either hiring the wrong just don’t get it,” proclaims the CEO, people or spending her time at the never thinking for a moment that he wrong levels of the organization. It’s or she is the one who hired them. appropriate for a CEO to manage “Market conditions have changed,” operations if absolutely necessary, continued on page 29 Businessuite Magazine December 2012
Feature but he should quickly hire good op- Setting vision is the CEO’s job, but erational managers and return to nothing tells him or her if expecleading the whole business. tations are too low. The CEO isn’t penalized for missing the grander If the CEO also comes to believe that vision. Such sins of omissions are the title grants infallibility, watch out. a CEO’s worst enemy. He can be CEOs can reinforce their delusions lulled into mediocrity by not knowof grandeur by giving themselves ing what would have been possible. higher salaries. Then when layoffs The 9.5+ 100m was considered imcome, the CEO wants applause for possible…until Usain Bolt ran it. A having the moral strength to make CEO may limit him/herself by not “hard choices,” quietly overlooking realizing that he/she can do a better how his or her own poor decision job. making led to the need for layoffs.
Though salary benchmarks are common, performance benchmarks are surprisingly rare. Quality learning demands a CEO benchmark herself against other superb CEO’s. His or her central learning question is not “are you doing a good job?” but “are other CEOs doing a better job and if so, how can you learn to measure up?” The best place a CEO in the local industry could start looking for benchmarks are in this year’s (or any other recent) Businessuite’s Top 10 CEO ranking.BM<
CEOs can stop learning well Of course, once infallible, there’s no more to learn, and a CEO may quietly stop learning. Without daily oversight and high quality feedback on how he or she does the job, the individual can mistakenly believe that his or her actions lead to success. In reality, he or she may be doing the wrong thing, but staff may be working around the clock to cover for his or her mistakes. Furthermore, sins of omission aren’t penalized. A CEO who does an adequate job, but far less than she could/ should have done - goes unnoticed. In hindsight, Jamaica Inc. Software could have had a $1 billion market niche, and gone public with a valuation of billions. Instead, it stuck to one product, had little understanding of its markets, and ignored competition. Yet it still went public in a $300-million IPO. Was management penalized for a lack of vision and market responsiveness? Hardly! The top managers walked off with $60 million apiece, reinforcing the notion that they had done a great job. Yet with a slightly grander vision, the company might have been 10 or 100 times its size. Businessuite Magazine December 2012
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Top 10 CEOS
#2 - Brian George
A Supreme Leader
T
he name Brian George is no stranger to the Top 10 CEO list, having become a regular on the list since 2007. That year George, CEO and President of Supreme Ventures Ltd (SVL), made a commendable debut, interestingly at the same place he finds himself in this latest list, number 2. Subsequently, he was number 3 in 2008 before sliding to number ten in 2009. The 55-year old Trinidadian national has a first degree in physics of all things from Tulane University. He went on to pursue various management development programs, including Executive Development programs at the Ivy League, Stanford University.
In 2011, Supreme Ventures Ltd. celebrated 10 years of loyal service in the business of customer excitement and entertainment, with a product portfolio which includes: lottery games, sports betting, video lottery terminals (VLTs); electronic PINs and hospitality services. Supreme Ventures Ltd. is listed on the Jamaica Stock Exchange and was cross listed on the Trinidad and Tobago Stock Exchange up until February 2, 2012. The company still remains the leading provider of lottery and gaming operations in the Caribbean.
â&#x20AC;&#x153;Cash Pot remains the top player in its SVL continues to be one lottery portfolio, as it represents 76.64% of the most respected and brands in Jaof total lottery revenue. Cash Pot in- recognizable maica. Under Georgeâ&#x20AC;&#x2122;s ascreased by 12.31% when compared to tute leadership, 2011 was a year of eliminating the previous year of $16.798 billion, also costs and relooking at their strategy in order to focus total sales being $18.866 billion.
on the core business of lottery and gaming. In August 2011, the Group rationalGeorge was appointed ized its gaming lounge operations to improve efficiency Chairman of the Board of Directors of the Ports Security Corps and as a Director of the Development Bank and productivity. Acropolis May Pen was downsized to of Jamaica Limited in March 2012. He is also a Board a betting lounge with 19 VLTs and now offers an intemember of the CHASE Fund which finances projects grated gaming lounge, lottery and sports betting operain the area of Culture, Health, Arts, Sports and Early tions. In September 2011, the Acropolis Portmore gaming floor was re-configured. Childhood Education.
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Top 10 CEOS On November 23, 2011 SVL signed an agreement with Lasco Financial Services Limited to conduct Money Gram remittance services at SVL’s Regional Offices through Lasco’s license. The company also voluntarily surrendered its Cambio licenses and discontinued these services under Supreme Ventures Financial Services Limited. The decision was implemented in order to improve and focus on the core business of lottery gaming, betting and gaming lounge operations. Cash Pot remains the top player in its lottery portfolio, as it represents 76.64% of total lottery revenue. Cash Pot increased by 12.31% when compared to the previous year of $16.798 billion, total sales being $18.866 billion. The fact that a company was able to wade through an assortment of financial challenges due to the local and global economic climate says a lot about the its leader(s) and its management. Consider the following: there was a decrease in discretionary income due to economic factors; unexpected high Cash Pot payouts above the game design of 72.2%, and delay in sports betting Regulations, which resulted in the inability to expand the network of agents. Despite these challenges, which would have toppled companies devoid of strong leadership, SVL ended on a satisfactory financial note and continues to be optimistic, with focus on its growing product portfolio, to ensure future profitability. The Supreme Ventures Group reported $27.962 billion in total revenues, a 10.66% increase over the $25.267 billion achieved in 2010. As a result, the Group’s net profit after tax was $606.326 million or a 43.93% increase over the previous year’s net profit after tax of $421.267 million. Other benchmarks were: • Return on Equity of 17.4% compared to 12.7% in 2010. • Earning per Stock Unit of $0.23 compared to $0.16 in 2010. • Dividend payments amounting to $0.17 compared to $0.14 in 2010 Chairman, Paul Hoo, noted that the company has had “a singular and significant achievement which we believe demonstrates our commitment to providing our shareholders with sustainable and increasing returns well into the future. This is the extension of our licence to operate from 2016 to 2026.” This commitment and 32
its accompanying achievement of the extension of its licences means that Supreme Ventures will be a mainstay in Jamaica’s betting and gaming industry well into the future and with George at the helm, this bodes well for the future for SVL. The major benefits to this notably achievement include: A negotiated significant reduction in the rates and extension of SVL’s agreement with GTECH to 2026. The signing of a long-term agreement with Intralot that would upgrade its lounges along with the implementation of the World Class IGEM online VLT monitoring system in Jamaica. The acquisition of land in downtown Kingston that will allow SVL to construct a head office building, while taking advantage of the incentives provided such as: Consolidation of offices; ability to exploit tax incentives on Urban Renewal Project and access to preferential interest rates. SVL not only boasts strong financial reports but considers itself a responsible corporate citizen through various sponsorships and donations to worthy causes during the year. This included the handing over of motor vehicles to the police force, the Supreme Ventures Courtney Walsh Cricket Clinics for youngsters under 15 years of age and a Christmas treat for children from the Maxfield Park Children’s Home, in addition to other social projects. So can we expect to see the talented and business savvy Brian George on the List next year? Certainly, if he continues to show the same level of dynamism that has served the company well during his tenure. “2012 will be a year of strategic growth and expansion. Our goal is to continue to expand the sports betting network, while simultaneously increase the revenue per terminal. The focus is on expanding third party betting shops, as SVL-owned and operated betting shops would require extensive capital expenditure to put in place. Maximizing the full potential, with an increase in terminals, will boost and enhance profits.” The CEO opined about the company’s outlook for 2012. “We will continue to cater to the preferences of our customers creatively and be innovative in executing game enhancements and promotions within our lottery portfolio.” BM<
Businessuite Magazine December 2012
Top 10 CEOS
#1 - Jeffrey Hall
The chips Fall into Place
L
ast year’s number 4 ranked CEO is back with a bang, climbing his way to the top spot on this year’s list. Jeffrey Hall was appointed Group Managing Director of Jamaica Producers Group in July 2007 after joining the Board in 2004 and joining the Group in 2002. Hall serves on the Board’s Audit, Compensation and Executive Committees. He is also a Director of the Scotia Group Jamaica Limited, Kingston Wharves Limited, Blue Power Group Limited, JAMPRO and Agro-Invest Corporation. Mr. Hall received his Bachelor of Arts degree (summa cum laude) in Economics from Washington University, his Masters degree in Public Policy from Harvard University and his Juris Doctorate from Harvard Law School. He has practiced law as a member of the New York Bar.
provide processed foods like smoothies, banana chips and juices. For the year 2011, JP generated total revenues of $6.18 billion, an increase of 5% relative to 2010. With profits attributable to shareholders in 2011 of $963 million, JP experienced a 208% increase over 2010. The single largest contributor to this increase was a gain on the disposal of long-term investments. What has placed this company on the fast track to unprecedented productivity and a number one CEO placing is a number of strategic initiative implemented by Hall and his team during the year 2011.
In November 2011, JP, through its Dutch subsidiary, A.L. Hoogesteger Fresh Specialist B.V. (Hoogesteger), commissioned a new juice processing plant aimed at extending the shelf-life of freshly squeezed juice. This The Jamaica Producers Group is a Jamaican-owned juice processing facility is the first of its kind in the and operated company which came into being on April world and is designed to use electrical impulses as an 1, 1929, as a direct descendant of the Jamaica Produc- alternative to traditional heat or pressure treatments ers Association formed in 1925, under which separate (such as pasteurisation) to destroy the bacteria that co-operatives- one for the marketing of each agricul- may develop in fresh juice. The difference between the tural product - were set up. It had an initial member- traditional treatments and JP’s new Fresh Micro Pulse ship of 6,145. technology is that their process does not lead to the destruction of the natural cells found in fresh fruit It has since grown from strength to strength, diversify- juice and results in fresh juice with a taste comparable ing into shipping, and moving up the value chain to to untreated juice and an extended shelf-life of approx-
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Top 10 CEOS In October 2011 a joint venture owned by JP and PanJamaican Investment Trust Limited acquired the asThe introduction of this technology is unquestionably a sets and certain liabilities of Mavis Bank Coffee Faclong-term investment for JP, but it is expected to begin tory Limited (Mavis Bank). Mavis Bank is the largest to make a positive contriprocessor of Jamaican bution to profits in its secBlue Mountain Coffee. ond year of operation. The The company exports its capital investment associat- “Nowhere is a company’s success more green bean products to ed with this project totalled directly attributable to the strategic Asia, the USA and Eu$300 million and included moves of its leadership than the Ja- rope. Its roasted coffee the purchase of plant and products are also sold equipment as well as the maica Producers Group Ltd. More than internationally under acquisition of a 32,000 the Jablum brand as well square foot building to al- enough reason to place CEO Jeffery Hall as in Jamaica where we low for the general expan- at the very top of this year’s CEO listing. have a strong presence in sion of their operations. JP the travel retail channel. expects to achieve its tarJP’s direct investment in geted return on investment connection with its 50% by leveraging the extended share of the Mavis Bank shelf-life of its juices to exacquisition will amount pand its sales outside of the Netherlands. During 2011 to $122 million, which includes $56 million incurred JP successfully introduced the new product in Ger- prior to the end of 2011. Prior to the acquisition, the many and Belgium and expects to achieve the required company had been loss-making. Although Mavis Bank throughput levels by the end of 2012. was able to achieve an immediate operational turnaround since the acquisition, in the short-term it will imately 21 days.
Proudly Serving Jamaica Since 1929
Taste Jamaica Jamaica Producers Group www.jpjamaica.com
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Businessuite Magazine December 2012
Top 10 CEOS require the ongoing re-investment of a considerable share of its profits if it is to achieve the growth potential as well as quality and efficiency standards that we feel are appropriate for this iconic Jamaican business. The Group’s initial capital investment program for the business will see the commissioning of a state-ofthe-art waste-water treatment facility at a cost of $59 millon. We feel that this facility sets a bold new environmental standard for the Jamaican coffee industry. Future development plans will centre on factory efficiency, product and market development, and extension services to improve their supply base and generate productivity gains for local coffee farmers. Mavis Bank is treated as a joint venture company in JP’s consolidated accounts and accounted for under the equity method. The company also make certain critical moves in the area of land management and logistics. In March 2011 their subsidiary, Four Rivers Mining Company Limited (Four Rivers), commissioned its aggregate extraction and processing plant. This entity is located at their Agualta Vale farm in St. Mary. The business has already developed a solid base of customers along the North Coast and has become a leader in its key product categories. The business experienced start-up losses in the first half of 2011 but generated a positive contribution to the Group’s results in the second half of the year. The total investment by JP in connection with the start-up of this project was $90 million.
and cold storage, and 53,000 square metres of offdock storage for motor vehicles. The KW terminal has a 1,655 metre continuous quay that provides nine deep-water berths for roll-on-roll-off, lift-on-lift-off, general break bulk, containerized cargo and bulk cargo, vessels. The KW port facility was, however, built in the mid1960s and was designed primarily to process break bulk and non-containerized cargo. As a consequence, the near 50-year old facility requires some rehabilitation of its infrastructure and a redesign of key aspects of its operations to effectively compete in a market for logistics services that is increasingly dominated by containerized cargo. At the same time as it seeks to rehabilitate its core infrastructure, KW will focus on growing revenues by intensifying the development of trans-shipment operations, developing strategic synergies with trans-Pacific lines and increasing its operating efficiency. The ability to process increased numbers of vessels and larger vessels will enable KW to grasp the opportunity presented by the expansion of the Panama Canal and thus grow cargo volumes, expand into new services and participate in the creation of an international logistics and distribution hub in Kingston.
In order to re-position the port for growth and improved returns as a trans-shipment terminal, KW has developed a five-year development plan that will benefit from the proceeds of JP’s investment. The key elements of the project include the refurbishment of Subsequent to the close of 2011, Kingston Wharves berths, the relocation of the existing warehouses and Limited (KW), a company listed on the Jamaica Stock the procurement of additional equipment, including Exchange, accepted an offer by JP to subscribe for cranes, stackers, trucks and other haulage equipment 357,550,000 ordinary shares of KW at a price of $5.00 to process and move an increased volume of containper share. The total amount of the investment is $1.79 ers through the port. billion and will result in JP holding 26% of the issued shares of KW (after taking into account its share- Nowhere is a company’s success more directly attribholding prior to the transaction). This investment is utable to the strategic moves of its leadership than the a long-term strategic investment for JP, and follows Jamaica Producers Group Ltd. More than enough their plan to leverage their asset base and manage- reason to place CEO Jeffery Hall at the very top of this ment knowledge to diversify their business and im- year’s CEO listing. Asked in a local newspaper about what defines him as a manager, Hall said: “I guess ... prove overall shareholder returns. other people will say that I have the ability to do what KW is recognized as a leading private multi-purpose is required to develop new strategy, to be strategic, port terminal operator in the Caribbean. The compa- that is, to identify the strategy at the macro level takny operates a comprehensive range of terminal equip- ing into account the effect at the local level and see to ment across 260,000 square metres of open storage the execution.” BM< space, 24,000 square metres of covered warehousing Businessuite Magazine December 2012
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Feature
Top 10 CEOs on the Junior Stock Exchange Similar to our annual listing of Jamaicaâ&#x20AC;&#x2122;s Top 10 CEOs, the Top 10 CEOs of companies listed on the Junior Stock Exchange, are based on after tax profits for 2011 compared to 2010. Also captured below is the percentage change between the two years and the numeral value of the increase in profitability between the two years. Ranking
Company
1 Cargo Handlers Ltd. 2 General Accident Insurance Co. Ltd. 3 Lasco Manufacturing 4 Lasco Distributors Ltd. 5 Dolphin Cove Ltd. 6 Lasco Financial Services Ltd. 7 Blue Power Group Ltd. 8 Honey Bun (1982) Ltd. 9 Jamaican Teas Ltd. 10 AMG Packaging & Paper Co.
2011 after tax profits* 51,919 1,217,926
2010 after tax profits* 1,326 122,055
Percentage change 3815.46 897.85
$ change*
401,201 306,398 204,477 29,775
109,823 97,721 69,170 10,363
265.32 213.54 195.62 187.32
291,378 208,677 135,307 19,412
54,607 27,630 82,563 31,265
29,199 17,190 58,035 22,606
87.02 60.73 42.26 38.30
25,408 10,440 24,528 8,659
50,593 1,095,871
*â&#x20AC;&#x2122;000
#1 - Mark Hart, CEO, Cargo Handlers Limited Mark Hart founded Caribbean Producers Jamaica Limited in 1994. Mr. Hart serves as the Chief Executive Officer of the Hart Group of Companies including Caribbean Producers of Jamaica Limited. He has considerable experience in management. He serves as the Chairman of Montego Bay Ice Company Limited, a JSE Main Market listed company. Mr. Hart serves as the Chairman of the Airports Authority of Jamaica. He served as a Member of the Board of Directors of Dehring Bunting and Golding Limited (now Scotia DBG Investments Limited) and Scotia DBG Investments Limited (Formerly, Dehring Bunting & Golding Ltd.) since 1992. He served as Director of Scotia Investments Jamaica Limited. Mr. Hart is a graduate of the University of Miami.
#2 - Sharon Donaldson is the Managing Director of the General Accident.
Ms. Donaldson has been with the General Accident for over 20 years, first joining as the Financial Controller in 1989 before becoming Managing Director in 2001. In addition to her responsibilities at the Company, Mrs. Donaldson is a Director of Musson (Jamaica) Limited. She also represents the local general insurance industry in discussions with the FSC and chairs the Finance and Accounting Committee of the Jamaica Association of Gen36
Businessuite Magazine December 2012
Feature eral Insurance Companies (JAGIC), the local industry association. Ms. Donaldson holds an LLB from the University of London, England, an MBA from University of Wales. She is a Chartered Accountant, a fellow member of the Institute of Chartered Accounts of Jamaica and an attorney at law.
#3 – Eileen A. Chin, Managing Director of LASCO Manufacturing Limited Dr. Eileen A. Chin, MD, MBA serves as Managing Director at LASCO Manufacturing Limited and served as its Chief Executive Officer. Dr. Chin also serves as a Non-Executive Director of Lasco Financial Services Limited and LASCO Manufacturing Limited. She serves as a Non-Executive Director of Lasco Distributors Limited. Prior to this, she taught medical students from 1993 to 1998 in Giron School of Medicine, Havana. She specialized in histology. She has furthered her knowledge ... and skills development with Lean Six compliance training and advanced negotiation skills training. Dr. Chin holds a Medical Degree from Havana University’s School of Medicine and an MBA in Global Management.
#4 – Peter Chin, Managing Director Lasco Distributors #5 – Stafford Burrowes, CEO - Dolphin Cove Limited Stafford Burrowes CEO of Dolphin Cove started the company from a mere idea in 1991. “We started by just fantasizing about it, then we decided to make things happen. In 1999, we opened our doors with just 4 dolphins and 22 employees, and Dolphin Cove was an instant success.” The company grew tenfold within a few years, and today, Dolphin Cove is a hit! Dolphin Cove hosts approximately 250 staff members in various departments, including front office staff, trainers and tour guides, all trained and experienced in their field. But the key component to Dolphin Cove’s success is their excellence in the hospitality industry and their passion for dolphins. This, added to their sense of professionalism and their dedication, puts them on top of list for swimmers and dolphin.
#6 - Jacinth Hall-Tracey, CEO and Managing Director of LASCO Financial Services Limited
Ms. Hall-Tracey also serves as the Compliance Officer at LASCO Financial Services Limited and Vice-President of the Jamaica Money Remitters Association. Prior to this, Ms. Hall-Tracey was the President of the Cambio Association of Jamaica. She serves as a Director of LASCO Financial Services Limited. She is also a member of the Miss Jamaica Festival ... Queen Committee where she assists in programmes to develop young Jamaican women and the Grace Morrison Foundation for Early Childhood Development (Grantspen and Shortwood Communities). Ms. Hall-Tracey holds a B.A (Hons) in French and Economics from the University of the West Indies, and is certified in corporate treasury and cash management, having attained the status of Certified Treasury Professional (CTP). Businessuite Magazine December 2012
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Feature #7 – Major Noel Dawes, Managing Director of Blue Power Group Limited Major Dawes has been the Managing Director Blue Power Group Limited since March 6, 2012. Dawes served as General Manager of Blue Power Group until March 6, 2012. He was instrumental in the construction and start up of the Lumber Division at Papine in 1999. He has over twelve years military experience with The Jamaica Defence Force (JDF) and has served in several Units throughout the organization. He received military training in Canada, the United Kingdom and ... the United States. He has held senior management positions in other business organizations including: General Manager of Securicor Jamaica Limited, and Operations Officer for Gand International (Norway). He has been a Director of Blue Power Group Limited since 1998. Maj. Dawes holds a Diploma in Management Studies from the Jamaica Institute of Management.
#8 – Michelle Chong, CEO of Honey Bun Jamaica Mrs. Michelle Chong was recently dubbed “Endless Giver, Restless Enthuiast” in Stocks and Securities recent campaign highlighting successful Jamaican entrepeneurs. Educated at York Univeristy in Toronto, Ontario, Michelle has been the absolute driving force behind the company’s success. A self proclaimed workaholic, Michelle is a shining example that hard, honest work pays off. A serious business woman with a kind heart, Michelle has spent endless hours developing and advancing staff and has ensured that a Christian spirit is maintained within the organization and that positive family values are always promoted through the company’s marketing activities. A true leader, who is both loved and respected, commands performance through example and motivation.
#9 – John Mahfood, CEO of Jamaican Teas Limited John P. Mahfood has been the Chief Executive Officer of Jamaican Teas Limited since January 2007. Mr. Mahfood served as Chief Operating Officer (COO) for the Retail and Trading Division of Grace Kennedy Ltd. until July 2006. During his tenure at Grace Kennedy he headed its international division, and led the merger of Rapid Sheffield and Hardware & Co. Ltd to form the largest hardware group in the Caribbean. Mr. Mahfood also led the successful expansion and turnaround ... of the Hi Lo Supermarket chain. He is a Certified Public Accountant and is a fellow of the Institute of Chartered Accountants
#10 – George Hugh, CEO of AMG Packaging and Paper Company Limited In 2005, George spearheaded the formation of the Company, based on his research and survey of the local market. He saw the potential for a packaging company offering services to commercial customers. A founding shareholder in 2005, he joined the Board a year later in 2006 and became the Chief Executive Officer of the Company in 2009. As Managing Director of the Company, George is responsible for overseeing its day to day operations with support from the senior management team, and for its strategic direction. He is committed to the expansion of the product range and production capacity of the Company. 38
Businessuite Magazine December 2012
Feature
The World’s Top 10 CEOs So we have presented the Ten CEOs in Jamaica. But who are the top 10 CEOs in the world? We did some research and came up with the following list. One invented early versions of Google while writing his dissertation. Another dreamed up the coffee giant Starbucks after experiencing the charms of Milan’s coffee-bar culture. One is the third African-American leader of a Fortune 500 company. These are the world’s top CEOs, according to a list ranking the approval ratings of each on Glassdoor. While the Businessite Top 10 list is based on financial performance, for this particular list, more than 280,000 employees were asked to answer a simple question: “Do you approve of the way your CEO is leading the company?” All of those who made the top 10 have an approval rating that tops 89%. Glassdoor is a jobs/career community that features company reviews and salary information.
#9 Howard D. Schultz of Starbucks Approval Rating: 89%
Howard D. Schultz is chairman, chief executive and chief global strategist for Starbucks. Joining the coffee chain in 1982 when it had just four stores, Mr. Schultz engineered the company’s rise and worldwide expansion. Mr. Schultz helped make the arrival of a Starbucks in a community a major event, a recognition that a town or neighbourhood was worthy of the chic Seattle-based chain
#10 Blake W. Nordstrom of Nordstrom inc.
Approval Rating: 89%
Nordstrom’s employee handbook only contains 75 words, with this section on rules: “Rule #1: Use your best judgement in all situations. There will be no additional rules.” Mr. Blake W. Nordstrom has been the President of Nordstrom Inc. since August 2000 and also serves as its Principal Executive Officer. Mr. Nordstrom is an Officer of Nordstrom Inc. since 1991. The 51 year old CEO has been employed by Nordstrom Inc. since June 1976. He began his career working in the stockroom of the downtown Seattle store.
Businessuite Magazine December 2012
#8 Paul Martiz of VMware Approval Rating: 90%
Born and raised in what is now know as Zimbabwe, Maritz also serves as chairman of the board of the Grameen Foundation, which sponsors third-world development projects. He was responsible for essentially all of Microsoft’s desktop and server software, including such major initiatives as the development of Windows 95, Windows NT, and Internet Explorer during his tenure from 1986-2000. Maritz was the recipient of the 2011 Morgan Stanley Leadership Award for Global Commerce, “which recognizes individuals whose per39
Feature sonal leadership has made a critical contribution to the focused on driving the company’s growth and mission effective use of information technology throughout the to deliver innovative, energy-efficient products. Under world.” Otellini’s guidance, Intel also aims to usher in a new era when portable wireless computing is available anytime, anywhere. The company also is focused on bringing the next billion people online with affordable computers tailored to their needs. He is credited with launching partnership which resulted in IBM using Intel microprocessors for the world’s first personal computer in 1981.
#7 Pierre Nanterme of Accenture Approval Rating: 91%
Pierre Nanterme is Accenture’s chief executive officer. Mr. Nanterme is responsible for managing the company, formulating and executing long-term strategies, and interacting with clients, employees, investors and other stakeholders. Nanterme is Accenture’s primary decision #5 Larry Page of Google maker and policy maker, setting the tone for the comApproval Rating: 94% pany’s values, ethics and culture. He serves on Accenture’s Board of Directors and leads Accenture’s Global As Google’s chief executive officer, Page is responsible Management Committee. for Google’s day-to-day-operations, as well as leading the company’s product development and technology strategy. He co-founded Google with Sergey Brin in 1998 while pursuing a Ph.D. at Stanford University, and was the first CEO - growing the company to more than 200 employees and profitability. From 2001 to 2011, Larry was president of products. Page holds a bachelor’s degree in engineering from the University of Michigan, Ann Arbor and a master’s degree in computer science from Stanford University. He is a member of the National Advisory Committee (NAC) of the University of Michigan College of Engineering, and together with co-founder Sergey Brin, Larry was honoured with the Marconi Prize in 2004.
#6 Paul S. Otellini of Intel
Approval Rating: 93%
Paul S. Otellini is president and chief executive officer of Intel Corporation. He became the company’s fifth CEO on May 18, 2005. Since joining Intel in 1974, Otellini has managed several Intel businesses, including the company’s PC and server microprocessor division and the global sales and marketing organization. He’s 40
Businessuite Magazine December 2012
Feature
#4 Ken Chenault of American Express
#2 Jim Turley of Ernst and Young
Approval Rating: 94%
Approval Rating: 95%
Kenneth Chenault was born June 2, 1951 in Mineola, N.Y. He accepted a job in 1981 with American Express. He rose through the ranks and implemented strategies that revived the firm in an era of cutthroat competition. By the time of his appointment as CEO and president in 1997, it was evident that he would likely be chosen as American Express’s next CEO, which he was in 2001.
James S. Turley is Chairman and Chief Executive Officer of Ernst & Young, a leading global professional services organization providing assurance, tax, transaction and advisory services. With approximately 152,000 people in 140 countries, Ernst & Young is one of the largest professional services organizations in the world. He has worked to create a high-performance work environment with a highly visible leadership commitment to “Quality in Everything We Do.” Ernst & Young has been consistently recognized by Fortune magazine as one of the 100 Best Companies to Work For.
#3 Paul E. Jacobs of Qualcomm Approval Rating: 95%
Jacobs is the rare public company CEO who succeeded his father without stumbling. Qualcomm was founded by MIT engineering professor Irwin Jacobs, who developed the CDMA wireless-communication standard. Paul Jacobs is a distinguished electrical engineer in his own right, with more than 40 wireless-technology and -device patents to his name. Today, all 3G handset makers must pay royalties to Qualcomm if they want their phones to connect to CDMA networks. Sales rose 28.7% over the past year.
Businessuite Magazine December 2012
#1 Tim Cook of Apple
Approval Rating: 97%
Cook joined Apple in March 1998 as SVP of Worldwide Operations and also served as EVP of Worldwide Sales and Operations and was COO until he was named the CEO of Apple on August 24, 2011, succeeding Steve Jobs. Cook had previously served as acting CEO of Apple after Jobs began a medical leave in January 2011. In early 2012, he was awarded compensation of 1 million shares, vesting in 2016 and 2021, by Apple’s Board of Directors. As of 2012, Cook’s total compensation package of $378 million makes him the highest paid CEO in the world. 41
Techno Logic
Tech Gadgets for the CEO on Top Today’s CEO at the top of his or her game must rely on a number of gadget and tools to get the job done as effectively and efficiently as possible. Here are but a few of the tech toys that can make a CEO’s life a who lot easier Nothing makes a statement in a CEO’s room like a large-screen sliver-thin television. Presentations made on one of those gleaming pieces of hi tech would be instantly convincing. But apart from the glitz, a big television makes more sense today because CEOs are increasingly switching to small laptops, whose screens are barely able to grab the attention of anyone sitting a few feet away. Kit a TV of say 40 or 46 inches with an HDMI cable connectable to a laptop and you have a place to video conference, make presentations, and discuss documents with others. It also makes sense to ensure your television is Internet capable.
Although it may seem like overkill to carry both a laptop and a tablet, there are some things only a tablet can do. You can choose to go either of two ways. Get a tablet to whip out when you’re on the go and don’t want to unsheathe a laptop. That means something small, like the Samsung Note. While there are many Android tablets in the market, none yet has a significant advantage over the iPad and its ecosystem. The Note’s hybrid size gives it the edge of handiness. E-mail, messaging, browsing, quick-marking documents, and even precision work is possible because of its stylus S-Pen. For a more full-fledged tablet experience, the iPad is a fantastic companion, giving the CEO not only alternative ways of working when they needs to, but enriching their activities, whether they involve kicking back to read a book or watching a movie on the airplane. The over 500,000 apps cater to needs you didn’t even know you had.
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With everything being about on-thego, here’s one that isn’t. A personal coffee machine in your room not only means you can work in peace and quiet without interruption but that you can disarm visitors with coffee of their choice, always a great aid to discussion. Cheap drip filter coffee machines don’t result in great taste and manual espresso machines may give great tasting coffee, but are too tedious and time-consuming. Automatic and semi-automatic machines have a strength and volume that is electronically controlled but one still needs to work with coffee grounds. The top end machines are repositories for coffee beans that are automatically ground while making the coffee and mix the milk with a single touch. Top brands include are DeLonghi, Siemens and Philips. A new breed of machines are the ones that use coffee ‘capsules’. Drop the capsule into the machine and press a button. A wonderful espresso is ready quite quickly. No mess, no fuss. The coffee is delicious and several flavours and strengths, including decaf are available. Where smartphones are concerned, the CEO is spoilt for choice. And yet, as a person who needs to be connected with colleagues all the time, they need a smartphone that works well with those of others, is reliable, a known quantity and secure. That mostly means the BlackBerry, perhaps the top-of-the line Bold 9900. While BlackBerry maker Research in Motion’s troubles are no secret, it is a fact that professionals still lean towards BlackBerry phones. That doesn’t mean it has to be the only smartphone. Pick either the iPhone 5 or go the Android way with the Samsung Galaxy S3. Until another smartphone becomes as preferred, the work phone of choice is a still BlackBerry. This year, Ultrabooks, light, thin stylish SSD-based notebooks based on Intel’s specs began to flood the market. For professionals on the move, they make tremendous sense. Quick-starting and working fast, these are designed to make working through the day more effortless. Battery life is not less than 5 hours, making it easier to carry the device around without worrying about heavy power adaptors. Today, one can think of an Ultrabook-desktop or Ultrabook-notebook combination, provided you use cloud storage to move your data between devices - very easy to do. Many Ultrabooks will be coming soon, to add to the list of Asus, Samsung, HP, Dell and Lenovo. Many point out, however, that Ultrabooks are only an imitation of the MacBook Air, which is what you might like to consider in 11- or 13-inch configurations. BM< Businessuite Magazine December 2012
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Businessuite Magazine December 2012