Military Gives CEOs an Edge With S&P 500 Rivals

Duty. Honor. Country. That’s the motto at the U.S. Military Academy in West Point, N.Y., which trains its graduates to lead troops in battle. But the skills they learn also prepare them to lead in corporate environments, as evidenced by the performance of the companies where some have become chief executive officers. CEO Alex Gorsky of Johnson & Johnson, CEO Stephen Smith of Equinix, and CEO Scott Rowe of Cameron International have helped their firms live up to the Army’s 1980s recruiting slogan “Be all you can be,” consistently beating the S&P 500 with average returns of more than 30%. The trend also holds true for CEOs with a variety of military backgrounds, as illustrated in an index TheStreet created with data from its subsidiary BoardEx, which analyzes corporate relationships. Included are companies from foodmaker J.M. Smucker to defense contractor Raytheon and Pacific Gas & Electric Co., whose returns posted an average gain in the single digits, while the S&P declined.