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How We Did It?
The team at TechSci Research started the exercise of analysing the financial data of companies a month ago for the annual special issue of Most Valuable CEOs
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The team at TechSci Research started the exercise of analysing the financial data of companies a month ago for the annual special issue of Most Valuable CEOs. The research team collected the raw data to start with. We collated this, taking the BSE 500 companies as the foundation, which as always gave us the base and the representative range of listed companies. We have used it before to compile the lists for the BW 500 and Most Respected Companies for BW Businessworld. From these, we profiled the Most Valuable CEOs and placed them on a whole host of parameters.
First, though, we applied a set of filters to generate a list of companies whose performances could be calibrated. The filters were companies whose CEOs or heads had a three-year tenure at least and the company had a trading history of at least 700 days in the last three fiscal years. We applied the filter to companies where revenues generated were greater than Rs 250 crore for the 2020–2021 fiscal. We also factored in the average revenue for the previous three fiscal years to see the consistent performance.
The exercise for putting together the Most Valuable CEOs list got underway with total income for financial years 2017-2018, 2018-2019, 2019-2020, and 2020-2021 available in our database of companies. We began with the universe of 500 listed companies, keeping banks and financial companies as well as trading companies.
We arranged the filtered database into four categories: Super Heavyweight (revenue of more than Rs 20,000 crore), Heavyweight (revenue between Rs 7,500 crore and Rs 19,999 crore), Middleweight (revenue between Rs 2,500 and Rs 7,499 crore) and Lightweight (Rs 250 crore to Rs 2,499 crore). For banks, interest earned (and for other companies, income from operations) was considered as revenue for the purpose of categorisation of the heads.
We have only included companies for which total income data was available for the last four years. The shortlisted companies are there on the basis of the average growth rate for the last four years and the average market capitalisation for the financial year 2020–2021.
We have not included the companies whose average growth rate was coming out to be negative. As a result, more than 150 companies with a positive growth rate as well as those with high income and market capitalisation were shortlisted. After getting the exhaustive list, we further came up with the list of all the companies and their respective heads, whether CEOs, MDs, or Chairman, in case there was no CEO or MD, who were working continuously for three years during the period under consideration.
The average growth rate was given a 75 per cent weight and 25 per cent weight was collectively given to other parameters. We then once again reviewed the names, their roles, and ensured eligibility.