Fortune Finds Five Arkies (Jeff Hankins Publisher’s Note)

With Fortune recently publishing its annual “Fortune 500” feature and various rankings, let’s take note of how Arkansas companies are faring.

Coming from the land of dismal rankings, Arkansas can be pleased to check in at No. 24 among the states with the most Fortune 500 headquarters. That’s ahead of Mississippi (zero headquarters), Oklahoma (4) and Louisiana (2), and just behind Tennessee (7).

Our companies, their ranking and revenues are: Wal-Mart Stores Inc., No. 1, $258.7 billion; Tyson Foods Inc., No. 72, $24.5 billion; Alltel Corp., No. 251, $8.2 billion; Dillard’s Inc., No. 258, $7.9 billion; and Murphy Oil Corp., No. 340, $5.3 billion.

That’s $304.6 billion in revenue generated by the Big Five.

Fortune says Wal-Mart’s work force of 1.4 million is larger than the population of 12 states. It ranks fifth in market value, eighth in profits and 12th in equity value.

Here’s a pleasant surprise: Murphy Oil ranks No. 18 among the Fortune 500 for best total return to shareholders during the past five years, with an average return of 28.7 percent. Drilling success in Malaysia, rising oil prices and expansion of its Murphy USA retail arm have paid off for the El Dorado giant. This proves the “old economy” of oil isn’t such a terrible investment.

Tyson Foods ranks No. 9 on the list of companies with the best earnings per share growth rate during the past five years. Profits have improved 54 percent annually from 1998-2003, and that’s with a big boost from the IBP merger.

Among their peers:

• Wal-Mart far and away leads the merchandiser sector, with Target a distant No. 2 at just $48 billion in revenue. Dillard’s ranks ninth, ahead of Nordstrom but behind Kohl’s.

• Murphy is the 10th largest petroleum refining company.

• Alltel ranks 10th in the telecommunications sector in terms of revenue.

• Tyson ranks second in food production behind Archer Daniels Midland.

Among the Fortune 1000 firms, Arkansas can add J.B. Hunt Transport Services Inc. and Arkansas Best Corp. to the list. J.B. Hunt ranks No. 614 overall and fourth among trucking firms, while Arkansas Best is No. 845 overall and ninth in the sector.

• • •

While singing the praises of Wal-Mart Stores Inc. CEO Lee Scott in a recent column, I overlooked an impressive honor given to his predecessor and the current chairman of the executive committee — David Glass.

In the “Fortune 500” edition, published April 5, the editors name Glass “The Most Underrated CEO Ever” and feature him in a rare in-depth interview.

The story describes Glass as low-key compared with his larger-than-life mentor, Sam Walton. His tenure as CEO was from 1988-2000, and on his watch Wal-Mart revenue increased tenfold to $165 billion, earnings jumped from $628 million to $5.4 billion, and the stock price soared from $3.42 a share (adjusted for splits) to $55.

Of course, Glass appropriately gives credit to the company’s team effort and notes that “I just happened to be at the right place at the right time.”

But Glass is the one who convinced Walton to embrace technology, and the result is that Wal-Mart has revolutionized the retail sector. Glass also set into motion the company’s global expansion.

The Fortune interview addresses what many of us wondered: How did Glass manage to follow a legendary, charismatic leader like Sam Walton?

“Most people have enough ego that they want to distinguish themselves from a charismatic leader, and that’s what creates the problems,” Glass said. “I’m more interested in the satisfaction that we are doing the right things and we’re getting it done, and being a part of it. I like being part of a winning team. I don’t have to be the winning team.”

Glass and Lee Scott met when Scott went into Glass’ office years ago demanding that a $9,000 freight bill be paid. Glass insisted Wal-Mart didn’t owe the money but was impressed with how Scott handled the situation. Glass asked him if he would consider working for Wal-Mart, and Scott said: “Why would I work for a company that can’t pay a $9,000 bill?”

Wal-Mart never paid the money and Scott supposedly thinks it’s still owed, but the two obviously put the episode behind them.

(Jeff Hankins can be reached via e-mail at [email protected].)