Founder-led firms outpacing CEO-led ones in market recovery

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Technology companies led by their founders have been the standout winners in share price performance and profit growth this year, beating ...

Technology companies led by their founders have been the standout winners in share price performance and profit growth this year, beating companies led by other managers, according to a Reuters analysis.

Profit growth has outperformed too, with founder-led tech firms seeing growth of around 30per cent over the past five years versus 6.7per cent for companies led by other managers.Founder-led tech firms have a history of higher returns and faster recovery in the aftermath of a financial crisis. For instance, in the last bull cycle Amazon's shares surged fifty-fold, while those of Netflix's rose by 100 times.

This year, the top 400 founder-led stocks from all sectors have registered an average share price gain of 58.4per cent versus a 10per cent return for the top 400 stocks led by others. According to Refinitiv data, founder-led firms are expected to post average net income growth of 22.8per cent in the next three years, compared with 7.1per cent growth for non-founder led companies.https://fingfx.thomsonreuters.com/gfx/mkt/xklpymdqwpg/Founderper cent20ledper cent20companies'per cent20earningsper cent20growthper cent20andper cent20performanceper cent20.jpg

 

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