"Among the Top 100 Global Companies, 40 Are Owner-Run... Superior Sales and Net Profit Compared to Non-Owner Companies"

[Asia Economy Reporter Jeong Hyunjin] Among the top 100 global companies by market capitalization, 40 were owner-operated companies. Analysis showed that these companies outperformed non-owner companies in terms of management performance, with last year's sales being 1.2 times higher, employment 1.3 times higher, net income 1.8 times higher, and dividends 1.2 times higher.

On the 18th, the Federation of Korean Industries (FKI) announced that it analyzed the management performance of the top 100 global companies by market capitalization last year compared to 2015, arriving at these results. The FKI classified a company as an owner-operated company if it met at least one of the following three criteria: ▲ a single controlling family holds 50% or more ownership or voting rights (32% or more for listed companies) ▲ the founder or their family holds shares and participates in management ▲ descendants of the founder hold shares and participate in management.

(Data provided by the Federation of Korean Industries)

Among the top 100 global companies by market capitalization, 40 were owner-operated companies. Among the top 10 companies by market capitalization, eight were owner-operated companies, including Microsoft, Alphabet, Saudi Aramco, Amazon, Facebook, Tesla, Tencent, and Nvidia. The total market capitalization of the 100 companies surveyed was approximately $33.8 trillion (about 42.3 trillion KRW), with the 40 owner-operated companies accounting for $18.5 trillion, or 55%. The average market capitalization per company was $463.7 billion for owner-operated companies and $254.3 billion for non-owner companies.

Looking at management performance, as of last year, the average total sales of owner-operated companies were approximately $81.4 billion, and employment was 182,490 people, surpassing the total sales of $65.7 billion and employment of 138,315 people for non-owner companies. Net income was also $10.1 billion for owner-operated companies and $5.5 billion for non-owner companies, making owner-operated companies 1.8 times larger. The average debt ratio was 76% for owner-operated companies, about one-third of the 225% for non-owner companies. Average dividends were also $6.2 billion for owner-operated companies, $1.2 billion higher than the $5.0 billion for non-owner companies.

(Data provided by the Federation of Korean Industries)

Compared to 2015, total sales of owner-operated companies increased by 63.2%, and employment by 22.0%, significantly exceeding the sales growth rate of 7.1% and employment change rate of -0.3% for non-owner companies. Net income and operating profit of owner-operated companies increased by 135.6% and 100.5%, respectively, showing better profitability than non-owner companies, which saw net income decrease by 11.3% and operating profit increase by 4.1%. Capital size of owner-operated companies increased by 103.2%, 10.3 times that of non-owner companies (10.0%), and the debt ratio increase rate was 38.0%, only 0.4 times that of non-owner companies (89.1%).

During the same period, owner-operated companies increased their research and development (R&D) investment by 99.7% and facility investment by 93.1%, whereas non-owner companies' R&D investment growth rate was only 28.7%, and facility investment decreased by 3.8%.

Owner-operated companies also saw a significant increase in dividend size (213.9%) and diluted earnings per share (134.4%), recording dividend growth rates 6.3 times and diluted earnings per share growth rates 8.5 times higher than non-owner companies. Dividend payout ratio increased by 43.2% for owner-operated companies, while it decreased by 0.8% for non-owner companies.

The FKI analyzed that owner-operated companies have management advantages such as the ability to make quick decisions and undertake long-term investments, which explains why many global companies are owner-operated and why their management performance is superior to that of non-owner companies.

Yoo Hwan-ik, head of corporate policy at the FKI, said, "There is a general perception that owner-operated companies are rare overseas, but in reality, a significant number of global companies are owner-operated," adding, "It is necessary to dispel the negative perception that owner-operated companies are unique to Korea and perform poorly, and to improve related systems such as the designation system for the same person and excessive inheritance tax rates on family businesses, which were created under such negative perceptions."

This content was produced with the assistance of AI translation services.