Trump has made it abundantly clear. He is all in for the green. He rates his business record and self-professed personal wealth as the dominant cornerstones of his success. And the primary and overwhelming reason why Americans should trust him to lead this country, above and beyond all other candidates.
That myopic and constricted vision of leadership qualities is somewhat novel, as least as evidenced by the 44 previous choices for President that eight generations of American have made for the last 200 plus years, but so be it.
Trump is on the verge of becoming the 45th President of the U.S.
He has defined the TRVFS (Trump Relative Value Financial Scale) for all of us to marvel at, appreciate, and apply in practice.
O.K. Let’s try this Trump Scale on for starters.
We will use some of the most commonly available financial indices: measures of personal income, personal net worth, company revenue, company profits, number of company employees, company debt, company cash on hand, and company market cap, as markers consistent with and essential for a proper TRVFS assessment.
We will apply these measures, insofar as possible, to provide an accurate relative measure of four important American players. They are:
- Rex Tillerson, CEO of ExxonMobil (XOM), Trump’s Designee for Secretary of State
- Tim Cook, CEO of Apple (AAPL), America’s Chief Computer Maker
- Mike Pence, Governor of Indiana, soon to be Vice-President of the United States
- Donald Trump, CEO of Trump Organization and soon to be President of the United States.
All financial figures are best estimates from reliable public and media sources, but are subject to some variation due to stock market fluctuations. None are wildly swinging at the time this is written, so the values are considered to be largely accurate. The other worm in the apple, of course, is that Trump’s numbers derive almost entirely from a private business holding company, and thus are not subject to proper public audit or verification. In other words they contain an irreducible element of fudging and potential financial lipstick application.
That is the way Trump likes it, a minimum of close inspection which reduces his opportunity to practice financial creativity. However, it is the best we can do in real time. Caveat emptor for truthfulness.
Rex Tillerson is a native Texan from Wichita Falls, aged 64, who holds a college degree in civil engineering from the University of Texas (1975) and who has worked at Exxon his whole life. His 2016 annual compensation was $24.3 million, and his personal net worth was around $150 million before his recent ExxonMobil retirement buyout of around $180 million, so let’s make his current net worth roughly $330 million.
Tillerson has been CEO of ExxonMobil since 2006, so he has a 10-year record of financial business results. The latest complete figures for ExxonMobil cover the complete 2015 calendar year. Total company revenues in 2015 were $259.5 billion, and profits were $15.2 billion. In 2015, ExxonMobil had 73,500 employees. The company stock Market Cap on January 4, 2017 is $372.7 billion. Long-term company debt is about $46.2 billion and cash reserves are almost $3.86 billion. The company’s 2015 balance sheet total asses value is $336.8 billion, or which $251.6 billion is sunk in fixed assets: net property, plant, and equipment.
http://money.cnn.com/2016/07/29/investing/exxon-earnings-oil-crash/
https://ycharts.com/companies/XOM/market_cap
http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=xom
https://www.statista.com/statistics/264122/number-of-employees-at-exxon-mobil-since-2002/
http://www.marketwatch.com/investing/stock/xom/financials/cash-flow
http://www.marketwatch.com/investing/stock/xom/financials/balance-sheet
Tim Cook is an Alabama boy with an Auburn University college degree in industrial engineering (1982) and an MBA degree from Duke’s Fuqua School of Business (1988). He worked at IBM for 12 years (182-1994) and then Apple (1998-present) where he became CEO in 2011, after the death of Steve Jobs. So Cook has a substantial 5-year record of business results as CEO to evaluate. Cook’s 2015 annual salary was $10.3 million, and his personal net worth is $785 million.
Apple’s company revenues for 2016 were $214.2 billion, and net income was $46.7 billion. In 2016 Apple had 116,000 employees. The Apple (AAPL) company stock market capitalization (Market Cap) on January 4, 2017 is 618.7 billion. Long-term company debt is $79.4 billion and company cash reserves are $216 billion. This leaves Apple with a net positive cash position of $169 billion. The company’s 2016 balance sheet total asset value is $321.7 billion, of which only $27.1 billion is tied up in fixed assets: net property, plant, and equipment.
http://www.marketwatch.com/investing/stock/aapl/financials
https://ycharts.com/companies/AAPL/market_cap
https://www.statista.com/statistics/273439/number-of-employees-of-apple-since-2005/
http://www.fool.com/investing/2016/09/12/apple-inc-has-now-amassed-nearly-80-billion-in-deb.aspx
http://www.marketwatch.com/story/dont-believe-the-hype-apple-added-more-debt-than-cash-2016-10-26
http://www.marketwatch.com/investing/stock/aapl/financials/cash-flow
http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet
Mike Pence is the proverbial fish out of water financially, among this group.
Mike Pence is 57 years old and hails from Columbus, Indiana. He has a history degree from Hanover College (1961) and law degree form Indiana University (1966), and worked as a lawyer and talk radio host before serving as a congressman for 12 years (2001-2013) and then one term as Governor in Indiana from 2013-2017. His 2015 salary as Governor was $131 thousand, down from his Congressional salary of $174 per year. His net worth, compared to the rest is negligible (a virtual rounding error) at something between $200 thousand and $1 million. He does have a state and federal pension to rely on. His about to be Vice-Presidential salary will be $230,700 per year.
As Governor (functional CEO) of Indiana for four years his 2015 annual state revenues were $19.04 billion. We should also add to this figure the $10.3 billion in Federal aid and welfare payments Indiana receives, which the Governor administers, making his state’s total financial revenues $29.3 billion. The state of Indiana government had 28,087 state employees in 2015. The state ran a surplus of $50.6 million in 2015, and ended with cash reserves of $2.24 billion in all accounts. The state’s long-term debt is $46.4 billion. The Indiana state government does not have a Market Cap.
http://www.in.gov/itp/2406.htm
https://ballotpedia.org/Indiana_state_budget_and_finances
Donald Trump is a 70-year old New York native from Queens, son of a multi-millionaire real estate tycoon, who has a college degree in finance from the University of Pennsylvania Wharton School. He was announced as President-Elect of the United States on November 8, 2016.Trump is a business entrepreneur largely engaged in real-estate and associated business enterprises with hotels, golf courses, and club resorts. He also actively dabbled in reality TV for 12 years as a presenter and producer (2004-2015).
He is the CEO of the privately owned Trump Organization. In 2016 Trump reported that his 2015 personal income was on the order of $557 million dollars. This figure is somewhat squishy since it evidently includes both revenue and net income components, but let’s not let excessive accounting niceties interrupt our discussion. Our President-to-be assures us, everything is up and up, and all the numbers are kosher.
Trump’s salary as President would be $400,000 per year, but he has promised not to take it a gesture of good faith to the American people that he is not in it for the money. This grand gesture is however, illegal and not possible.
Trump’s personal net worth, according to Forbes, Fortune, and Bloomberg investigations is between $3.8 and $4.5 billion. Trump himself claims his actual net worth is closer to $10 billion, if you use his estimate for the value of his Brand. Again, let’s nit quibble over a mere $5 billion one way or the other, for our estimable leader’s hard currency value.
In 2015, the best estimate from private finance tracking sources is that the entire Trump Organization complex (some 500 named entities) produced approximately $9.5 billion dollars in revenue,. The business net income is assumed to be close to the $557 million claimed by Trump as his own personal income that year. Trump is the owner of the Trump Organization, and there are no publicly verifiable complete financial statements filed or available to facilitate independent review. The best external estimate is that Trump Organization may have as many as 22,500 employees, including contractions.
There is no established market cap for the Trump Organization business, since it not a publicly traded entity, and thus has no agreed upon trading value, though it may be in the neighborhood of $10 billion if Trump’s brand assessments are valid. No definitive long term company debt figures are known but they include at least $2-3 billion in current identified loans, lines of credits, and mortgages on a number of his properties. Trump’s cash position, according to his 2016 candidate’s financial disclosure to the FEC, is somewhere in the neighborhood of about $200 million dollars. The company’s equity may be close to the $10 billion estimated by Trump, less the long-term debt and obligations.
http://www.politico.com/magazine/story/2016/11/donald-trump-salary-george-washington-214458
http://money.cnn.com/2015/09/03/news/economy/donald-trump-jobs-created/
https://en.wikipedia.org/wiki/The_Trump_Organization
https://origin-www.bloombergview.com/articles/2016-05-20/trump-s-financial-report-that-s-rich
Some Simple Comparisons Using the TRVF Scale Among our Players
Trump is in last place, among all four players, in experience in managing huge numbers of employees. Tillerson beats him by 3-fold, Cook by 5-fold, and even Pence by about 30%. Trump’s a greenie at big industry and Federal government-scale employee management and supervision.
Trump is older than the other three men, by as little as 6 years and as much as 14 years. Trump’s demonstrated educational credentials are tied for third place with Tillerson, and lag behind those of both Pence and Cook.
Trump has more individual personal net worth (he is a billionaire), and more marriages than the other three. Tillerson and Cook are mega-hundred millionaires. Pence is nowhere in financial sight with respect to personal wealth.
In company revenue comparison, Trump is dead last among all four in the size of his total business operations. Tillerson and Cook direct business entities 20-25 times larger than Trump’s best year. Even Pence’s annual business (government) spending is three times that of Trump’s entire private empire. Trump is the little guy in business revenue.
In current business profits, again Cook (84 times) and Tillerson (27 times) dwarf Trump’s best recent business performance efforts. Pence is not running a for-profit enterprise like the other three players, but he does generate a small profit ($50 million), if you fully count the extra 35% ($10.3 billion)of the Indiana state government expense budget given to them by the Federal government to pay for programs.
Trump says he made $557 million in business net income in 2015, a net income to revenue ratio of almost 6% Apple’s net income to revenue ratio in 2016 was 21.8%, more than three times better than Trump. For Tillerson and ExxonMobil, the net income to revenue ratio in 2015 was 5.8%, nearly identical to Trump’s business.
Trump has claimed he is the King of Debt in managing his businesses to profitability. Not by a long shot. Trump’s total business debt load is somewhere in the range of just $2-3 billion, and he made only a half-billion in profit in 2015. Tillerson responsibly manages $46 billion in company debt and maintains a comfortably profitable business performance, more than 50% higher than Trump’s total annual revenues, with no hint of bankruptcy on the horizon.
Cook does even better at Apple. He deftly handled $79 billion in business debt, and produced wonderful company and shareholder profits, 5 times higher than every dollar of Trump’s business. In his heyday (1990-2004), Trump was forced to declare business bankruptcy in his casino empire 4 or 5 different times, and he lost his personal stake in all those public businesses, just as he cost investors and stockholders billions of dollars of investment losses.
There is responsible business debt and irresponsible business debt and management. We have three examples here, Tillerson and Cook represent the former kind. Trump has proven the later kind, more than once.
Trump’s optimistic personal estimate is that his business empire Market Cap is as much as $10 billion dollars. Every day the stock market actually validates anew the Market Cap worth of ExxonMobil and Apple. As of today, ExxonMobil is worth $373 billion (37 times more than Trump’s companies), and Apple is worth %619 billion (61 times more than Trump’s entire enterprise).
Finally, ExxonMobil has about $4 billion in ready cash, just about 20 times as much as premier business genius Trump. Apple has $216 billion in cash reserves. But that comparison is not completely fair. Oh Apple actually does have all that cash, but a very large chunk of it is held overseas as unrepatriated retained earnings, so to be fair to Trump, much of whose actual real estate assets are located in the continental U.S.A., let’s subtract every penny of Apple’s long-term debt from their total cash hoard in order to level the playing field comparison. O.K. So now Apple only has $136 billion in net cash, which makes for a fairer comparison. And Apple now has just 683 times as much in liquid cash reserves as all of Trump’s empire holdings.
Holy Toledo and Wichita Falls. Apple might as well be four Texas sized counties over from Trumpville, in terms of a win that bid.
Across all the relevant dimensions of the TRVFS, Tim Cook comes out smelling like roses. And, best of all, he is an almost billionaire as well, so he would fit right in with the Trump inner culture comfort zone, you know with Ross, and Icahn, and Viola, and McMahon, etc.
Summary
You might say, well maybe the TRVFS should not be the single most important criteria to determine value. Remember, however, the the success criteria were announced and blessed by none other than Trump himself, when he articulated his vision of fitness to be President in 2015, and which he has maintained ever since.
Let’s take Trump at his original intention and his word.
Trump has earned the Number #1 slot at issue for the Administration, that of the President, because, of course, only Trump can be Trump.
Moving on, by all rights, Rex Tillerson belongs on the Trump Senior Team and in the Administration’s inner circle. Secretary of State, the Number #3 job at hand, is not a bad slot for him. But, for Heaven’s sake, by the numbers, Tim Cook richly deserves to occupy the Number #2 slot right behind Trump; that of Vice-President. He wins the evaluation contest going away.
Mike Pence is a nice enough sort of fellow, but he just doesn’t have the business chops to be in Trump’s very top tier. He might make a good Secretary of Agriculture.
What went wrong with the Trump decision algorithm? Can we have a Mulligan?
Selected additional bits on the subject:
The chief executive of the world’s largest publicly traded international oil and gas company may also be the next Secretary of State of the United States. In December 2016 Tillerson was tapped by President-elect Donald Trump as his nominee for the position; a potentially contentious Senate confirmation awaits. Tillerson started his career at ExxonMobil in 1975 and became CEO in 2006. The Texas oilman has close ties to the most powerful person on FORBES’ list, Vladimir Putin, whom Tillerson knew in the 1990s, when he led Exxon’s interests in Russia. More »
The Texas oilman has close ties to the most powerful person on FORBES’ list, Vladimir Putin, whom Tillerson knew in the 1990s, when he led Exxon’s interests in Russia. Under Tillerson’s leadership, Exxon has recovered from a steep drop in its stock price last year.
Rex Tillerson, the CEO and Chairman of ExxonMobil Corporation, is Donald Trump‘s nominee for Secretary of State. He is a surprising choice, since Tillerson has absolutely no experience in government or as a diplomat. Tillerson also has deep ties to Russia and is one of the faces of the oil industry as the chief executive of the eighth largest company in the world by revenue.
The New York Times’ list of the 200 highest-paid CEOs in 2016 puts Tillerson at number 29. He earned an estimated $24.3 million in 2016, according to the Times. If Tillerson becomes Secretary of State, his pay will be $203,700, according to the U.S. Office of Personnel and Management
Tillerson has an estimated net worth of $150 million, NBC News reports.
Trump tweeted on December 13 that Tillerson will be his nominee for Secretary of State. Trump praised Tillerson as “one of the truly great business leaders of the world.”
Tillerson is number 29 on the New York Times list of the 200 highest-paid CEOs in 2016. The Times estimates that he earned $24.3 million, down 15 percent from 2015.
Tillerson earned $27.3 million in 2015, The Washington Post estimates. This was an 18 percent pay cut from the year before, when he earned $33 million.
The Wall Street Journal reported in April 2015 that Tillerson earned $33 million in 2014. That was an increase from the $28 million he earned in 2013. Tillerson also had a base salary increase from $2.7 million in 2012 to $2.8 million in 2013.
The reason for the salary decrease in 2015 was due to Exxon’s eye-popping decrease in profits. In July 2016, CNBC reported that Exxon earned $1.7 billion in the second quarter of 2016, down from $4.2 billion during the same quarter in 2015. In the second quarter of 2015, the company’s total revenue was $74.11 billion, but the second quarter of 2016 saw total revenue fall to $57.694 billion.
NBC News reports that Tillerson’s estimated net worth is $150 million.
Tillerson, who has been at Exxon since 1975, was planning to retire as ExxonMobil CEO anyway, after 10 years in the position. He is currently 64 and will reach 65, the company’s mandatory retirement age, reports Bloomberg. His successor is expected to be Darren Woods, who has been at Exxon since 1999.
On December 14, ExxonMobil announced that Tillerson will retire at the end of the year. Darren Woods was elected Chairman and CEO, and will take the role on January 1, 2017.
The Washington Post reports that the April 13 proxy statement from Exxon shows Tillerson with a pension benefits worth about $69.5 million. In 2014, his pension benefits grew by $4.6 million, The Wall Street Journal reports.
Nasdaq shows that Tillerson has 2,618,856 shares in ExxonMobil stock as of December 1, 2016. That’s worth $233,078,184, based on the December 9 closing price of $89, CNBC reports.
ExxonMobil is still the largest publicly-traded oil and gas company by market value and is ranked sixth on Fortune Magazine’s Global 500 list. However, the company has recently seen declining revenues from year-to-year.
During the second quarter of 2016, ExxonMobil earned $1.7 billion, down a huge 59 percent from the same period in 2015, according to the company’s quarterly earnings report. During the first half of 2016, the company earned $3.51 billion, down 62 percent from the $9.13 billion earned in the first half of 2015.
The third quarter of 2016 saw an uptic in earnings, but it was still a big disappointment to investors. As the earnings report shows, ExxonMobil earned $2.65 billion, a drop of 38 percent from the $4.24 billion earned during the same period.
In the first nine months of 2016, the company earned $6.16 billion, compared to the $13.37 billion earned in the first nine months of 2015. “Results reflect lower refining margins and commodity prices,” the company noted.
“ExxonMobil’s integrated business continues to deliver solid results,” Tillerson said in a statement released by the company. “While the operating environment remains challenging, the company continues to focus on capturing efficiencies, advancing strategic investments, and creating long-term shareholder value.”
Exxon’s total revenue and other income from the first nine months of 2016 was $165,078,000, compared to $209,075,000 from the first nine months of 2015.
Rex Tillerson, Wikipedia:
Rex Wayne Tillerson (born March 23, 1952) is an American businessman. He is the chairman and chief executive officer (CEO) of ExxonMobil.
Tillerson began his career as an engineer and holds a bachelor’s degree in civil engineering from the University of Texas at Austin. Tillerson joined Exxon in 1975, and by 1989 had become general manager of the Exxon USA central production division. In 1995 he became president of Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc. In 2006, Tillerson was elected chairman and chief executive officer of Exxon, the world’s 6th largest company by revenue. Tillerson retired from Exxon effective December 31, 2016, and was succeeded by Darren Woods. He is a member of the National Academy of Engineering.
On December 13, 2016, President-elect Donald Trump announced that Tillerson would be his nominee for Secretary of State. He is a longtime contributor to Republican campaigns. Tillerson’s close business ties with Russian President Vladimir Putin have generated controversy, particularly in light of the revelations about Putin’s business dealings in the Panama papers. He has previously been the director of the joint US-Russian oil company Exxon Neftegas.
Tim Cook is the man behind the company with the world’s largest market capitalization (more than $610 billion as of December 2016) and the most profitable business in America–Apple brought in more than $9 billion in net income in its recent quarter. He’s a hugely influential player in technology, design, publishing, and entertainment. But 2016 presented some new challenges. In the spring Apple’s revenue declined for the first time in 13 years; many fear that the iPhone, which makes up about 60% of the tech company’s sales, has peaked. In September, the company announced that it removed the headphone jack out of its newest handset, a move that received mixed reviews.
Despite being recently called “insane” for expecting different results from a repeated action, Apple Inc. CEO Tim Cook’s net worth of $785 million says otherwise, even if he owes a lot of it to his predecessor, the late Steve Jobs. That being said, he is involved with some other major companies as well, only adding to his enormous wealth.
Tim Cook was born in Mobile, Alabama on November 1, 1960. His youth was simple and uneventful, graduating from Auburn University with a bachelor’s degree in industrial engineering in 1982 and an MBA from Duke University’s Fuqua School of Business in 1988 (though he did place in his graduating class’ top 10). Soon after graduation, he began working at IBM, eventually becoming the fulfillment director for all of North America and Latin America.
- Net Worth $785 million
- Salary (Apple) $10.28 million (2015)
- Total Compensation from Apple, 2009–2011 $438,730,426.00
- Worth of Apple Shares $120 million
- Restricted Stock Value (Options) $665 million (if fully vested)
- Worth of Stock Given to Him After Becoming CEO $378 million
- Tim Cook Net Worth vs Median U.S. Household 6,071 times greater
Indiana Governor Mike Pence has been a full-time elected official since being elected to Congress in 2000. That stretch of public service has kept the Republican nominee for vice president well behind his running mate Donald Trump when it comes to wealth.
Pence, unlike Trump, has never been a businessman of any note. And while he does have a law degree from Indiana University School of Law, where he graduated in 1986, the politician actually spent most of the 1990s as a conservative talk show and radio host, according to Biography.com.
From those early days, Pence has been a success, but he has not amassed a fortune anywhere near his running mate’s, nor does he have the hard-to-explain wealth many of his colleagues manage to amass while in office. Instead, Pence’s financial disclosure, filed with the Federal Election Commission, shows a man who makes a comfortable salary with good retirement benefits.
Where does Pence’s money come from?
While exactly how many billions Trump may or may not have has been a source of dispute, Pence’s net worth sits almost entirely in the value of his pension. The governor declares he has a pension from the state of Indiana worth between $500,000 and $1 million. He also declares two other smaller retirement/deferred compensation plans worth between $1,000 and $15,000.
Aside from that, Pence declares a bank account with less than $15,000 in it, as well as two 529 education savings accounts for his children, also worth less than $15,000 each. In addition the Republican nominee for vice president also shows seven student loans (for his children) taken out between 2013 and 2015 and ranging from $10,000 to $50,000 each.
Pence lists his job as governor of Indiana on the form, and lists his year-to-date income, as of Aug. 16, as $173,860. Pence’s wife Karen declares two businesses on the disclosure — “self-employed artist” and “That’s My Towel Charm, Inc.”; neither generated income of more than $1,001 for the former art teacher.
“Our family has been honored to serve our state and nation. Like many American families, we have been fortunate and blessed to raise three wonderful children and put them through college while doing work that we love,” Pence said in a statement released with the form and reported by Politico.
How much is Mike Pence worth?
Pence does not list any homes on his financial disclosure, but he may not currently own one, given that he resides in the Indiana governor’s mansion. Essentially Pence’s only major asset is his retirement savings, while he has significant student-loan debt.
It’s fair to say that even on the high end, Pence has less than one million in assets, and likely less than $500,000 when you factor in his liabilities. That’s actually a refreshing number, as it makes the candidate a bit more like the majority of Americans.
He may have a higher-paying job than most, but Pence lives mostly off the money he makes, and he has very little cushion should he find himself out of a job. Of course, governors are not simply laid off or let go — and win or lose, he should be in line for a book deal and big speaking fees down the line — but unlike so many of his political colleagues, Pence is not a rich man.
According to the Center for Responsive Politics, Pence’s most recent financial profile filed in 2012 indicate 18 assets that total between $59,021 and $364,000 for an average net worth of $211,510, not including the value of the home he owns in Indiana with his wife.
While this is still above the national average of $45,000, it’s significantly lower than his running mate, the average at the House of Representatives, and the pool of other presidential and vice presidential candidates for the 2016 race. In early 2015 Crowdpac compared the net worths of anticipated presidential candidates. Of the 23 potential candidates included, Pence’s net worth was the lowest, estimated at $150,000.