CHICAGO, Jan 03, 2001 Morningstar, Inc. today named Jorma Ollila, head of Finland-based Nokia (NOK), the worlds largest manufacturer of cellular phones, as the Morningstar CEO of the Year for 2000.
"Nokia has succeeded even as its competitors stumbled in 2000," said Pat Dorsey, director of stock analysis for Morningstar. "Ollila has always made sure that Nokias employees stay focused on the role mobile phones play in peoples lives, which has been the key to the companys success. This focus on giving customers what they want has helped Nokia to win valuable market share from its rivals, rewarding shareholders handsomely in the process."
The Morningstar CEO of the Year Award was designed to honor a chief executive who has put his or her stamp on an industry, while turning corporate success into greater wealth for shareholders.
Nokias dominance in the marketplace matches its success with investors. It sells nearly one out of three cellular phones worldwide and its market share is double that of its nearest competitor. Nokias sales, which grew nearly 60% in 2000, are impressive for a company that has projected revenues of $26 billion.
Nokia shares have appreciated by an average of 83% per year over the past five years, outperforming the S&P 500 index by a staggering 65 percentage points per year. Its return on equity is approaching 40% and the profit margin on its mobile phones hovers around 20 percent, beating much of the competition that is struggling with single-digit margins. Despite carnage in virtually all technology names this year, Nokia shares only lost a modest 9% percent in 2000. This is quite a contrast to Motorola and Ericsson, which saw their shares sink 59% and 32%, respectively, in 2000.
"Ollila has proved he has vision to match his prowess," added Dorsey. "He has forced Nokia to move beyond manufacturing cell phones, which are rapidly becoming commoditized. Using its expertise to aggressively move into the more lucrative wireless infrastructure business has paid dividends, and Nokia continues to gain market share."
Nokia was founded in 1865 as a paper manufacturer and has since been involved with chemical, rubber, and electronic industries before streamlining into the telecommunications business in the early 1990s. It supplies telecommunication systems and equipment for fixed, mobile, and Internet-protocol networks and markets its own cellular phones in more than 130 countries. Nokia also manufactures Internet-access and high-speed data-transmission phones, satellite receivers, and devices that integrate digital voice and data communications. Ollila joined the company in 1985 as vice president of international operations. He has been president and CEO since 1992 and chairman since 1999.
Harvey Golub of American Express, and Sandy Weill of Citibank were finalists in Morningstars CEO of the Year Award for 2000. Both leaders helped their companies flourish despite several interest-rate increases that have dampened the performance of most financial services firms.
The Morningstar CEO of the Year Award, first introduced in January 2000, rewards leaders who maximize shareholder value and demonstrate independent thinking. Winners are chosen by a cross-section of Morningstar analysts, editors and senior management, based on the companys own research. Charles R. Schwab and David Pottruck, co-CEOs of Charles Schwab, were the first recipients of the Morningstar CEO of the Year.
Morningstar has been presenting its Fund Manager of the Year Awards since 1988. During the past year, Morningstar has significantly increased its coverage of individual stocks and now provides in-depth analysis on more than 1,000 stocks.
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