Ronald Sargent
Age: 53
Company: Staples
Year Named CEO: 2002
Number of Employees: 91,000
2008 Stock Performance: –21.2 percent
Annual Compensation: $11.5 million*
Stock Options: $3.6 million*
Ronald Sargent has no Easy Button when it comes to steering Staples through the economic downturn, but the CEO’s three-pronged strategy for the office products superstore has impressed shareholders.
Sargent — a 20-year veteran of Framingham, Massachusetts–based Staples — focuses on taking care of customers, hunkering down on expenses and investing in the future. “The most important thing you can do is to maintain, or even strengthen, your relationships with your customers,” he says. Staples is coaching its sales associates to provide customers with more assistance and emphasize value by focusing on the often less expensive Staples brand. The company has also begun offering a free computer tune-up service to lure customers.
Sargent believes in looking at every expense in the corporate budget. “In this economy, where retail sales are down, it’s really important that you squeeze every nickel,” he explains. In 2008, Staples shed 2,000 jobs, eliminated executive bonuses and froze senior management salaries through 2009.
Sargent is also making sure to invest for future growth. Staples acquired Corporate Express, a Dutch office products supplier, in July 2008 for $4.8 billion in a bid to capture large-company contracts in North America and Europe. Staples expects the combined entity to generate cost savings of as much as $300 million. But the economic slowdown is taking a toll. For the three months ended in January, Staples posted net income of $286.1 million, down from $333.2 million a year earlier.
“Ron is one of the best CEOs I have encountered,” says one mutual fund manager. "[Witness his] acquiring Corporate Express at a reasonable price, integrating the company quickly into Staples and [operating it] very well in the worst job environment in 60 years.”
* Fiscal year ended January 31, 2008.
