Uncovering Wealth Brings Mixed Bag

We know our ears will be burning over this week’s lists of the “Wealthiest Arkansans.” I’m bracing for the calls.

We’ve snooped around and pored through hundreds of pages of documents to give readers a glimpse into the wealth of Northwest Arkansas and the rest of the state. The “Wealthiest Arkansans” list, first launched in 1995 by Arkansas Business, has become an ongoing work in progress as we continually research and discover new information throughout the year while updating individuals on previous lists.

tWe didn’t think the research could ever be as difficult as it was the first time. But throw in a stock split here and there, a handful of bank sales and ever-changing private company values, and you suddenly have a monster project.

tBusiness Valuation Services of Dallas provided some valuable assistance is evaluating the private companies.

tOn average, firms getting the highest price-to-sales multiples are manufacturers, dairy products, newspapers and oil and gas companies. On the low end are grocery chains, poultry processors, automobile dealerships and lumber companies.

Reactions We Hear

tOur first “Wealthiest Arkansans” list in Arkansas Business two years ago went over like a ton of bricks with those listed, but these days you would be surprised by the number of people who actually aspire to be on the list because it’s a measure of business success. Otherwise, readers seemed to enjoy the information.

tThe lists have been researched for three years, and we continue to discover wealthy Arkansans who either had the wealth all along or are just now amassing their family fortunes through successful businesses and wise investments.

tObviously we have hard data on stock holdings, so we’re very comfortable with the stockholders list. As for figuring family fortunes, only those families and their accountants and lawyers really know – and we certainly don’t expect the information to be shared with us.

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More Tidbits On The Wealthy

tHere are some other tidbits from our research:

t~ The Walton, Rockefeller, Stephens, Murphy, Tyson, Lyon and Jones families were on the 1996 Forbes 400 list of the country’s wealthiest people. Interestingly, Barbara Tyson – Don Tyson’s sister-in-law – was dropped because of what Forbes described as “new information over control of trust.”

t~ The Reynie Rutledge family of Searcy has an amazing investment portfolio, including several properties in Northwest Arkansas, among banks, an insurance company, golf courses, property management firms and interest in at least 15 apartment complexes. Brother-in-law developer Jim Lindsey of Fayetteville has him in on virtually all of his apartment-golf complexes called The Links.

t~~ A 1995 article by Larry W. Gibbs in “Trust & Estates” was complimentary of the financial planning of Sam and Helen Walton, saying:

t”The founders of the Wal-Mart empire acted early and carefully to create a full family partnership running the enterprise and to structure their estate to avoid taxes. Their success shows the importance of acting immediately rather than postponing estate-planning decisions, as a family enterprise can always grow. It illustrates the personal and economic value of risking the children’s full involvement as partners. The Waltons probably paid no estate taxes on Sam’s death, and will pay none on Helen’s.”

t~ The Waltons earned about $192 million and CEO David Glass took in $602,000 last year just from from Wal-Mart dividends. The Stephens family’s dividends from Alltel holdings was $17.6 million last year. The Tyson family earned about $7.6 million in dividends from the poultry company.

t~ Wh ?ile the Stephens family is generally best known for its Stephens Inc. investment banking firm, that arm probably ranks just fifth among their most valuable holdings with equity of $134 million. The wild card would be oil and gas reserves, which could range from $500 million to $1 billion, according to various estimates. Others are Donrey (owner of The Morning News of Northwest Arkansas) at an estimated $900 million, Alltel Corp. at $540 million and NationsBank at $334 million.

tJack Stephens has never disclosed details about the Donrey transaction. The Donald Reynolds Foundation, to which the late Donrey owner left his fortune, received a contribution of nearly $900 million that coincided with the sale in 1993. The American Banker reported that NationsBank Corp. underwrote the purchase and used the private placement market to help support a $500 million commitment.

We Apologize On All Counts

tWe recognize the personal nature of these lists, just as we do when executive compensation and public employees salary lists are published each year. This is our philosophy on the “Wealthiest Arkansans” list:

If you were omitted, don’t feel neglected just yet because eventually we might find you; if you’re listed and don’t belong, please go out and make more money so we don’t look so bad; if we underestimated your worth through our efforts to be conservative, we sincerely apologize and are not surprised.