Please forward to Advisory Committee
----- Forwarded by Steven J Kean/NA/Enron on 09/20/2000 09:47 AM -----

	Ann M Schmidt
	09/18/2000 08:59 AM
		 
		 To: Mark Palmer/Corp/Enron@ENRON, Karen Denne/Corp/Enron@ENRON, Meredith 
Philipp/Corp/Enron@ENRON, Steven J Kean/NA/Enron@Enron, Mary 
Clark/Corp/Enron@ENRON
		 cc: 
		 Subject: Enron Mentions

Manager's Journal: Heir to Greatness
By Gary Hamel

09/18/2000
The Wall Street Journal
A38
(Copyright (c) 2000, Dow Jones & Company, Inc.)

Sometime in the next few months, the board of General Electric will anoint a 
successor to the world's most
celebrated corporate leader. Running GE may be, as Jack Welch claims, the 
best job in the world, but his
successor may find it to be one of the toughest as well -- not because 
anything is going wrong at GE, but because
so much is going right, and has been for so long. 

Mr. Welch's successor will inherit a company that is already stupendously 
valuable, that has already shed most of
its unwanted pounds, and has already set a string of performance records. How 
do you do better than that?

This is more than a rhetorical question for GE's next chairman. Pity, for a 
moment, a few other heirs to greatness.
Doug Ivester was gone just 25 months after following the legendary Roberto 
Goizueta at Coca-Cola. Dale Morrison
lasted less than four years at Campbell Soup after taking over from 
cost-cutter extraordinaire David Johnson. British
Airway's Bob Ayling got pushed out after he had struggled unsuccessfully to 
fill the shoes of Colin Marshall. And
Durk Jager prematurely stepped down as Procter & Gamble's chairman after 
failing to live up to the lofty standards
set by earlier P&G leaders. 

Pretenders 

None of the pretenders succeeded in building greatness on top of greatness. 
In three of these cases, the board
brought back a recently retired CEO or chairman to shore up investor 
confidence. Sadly, Goizueta, who died in
October 1997, could not reprise his earlier success at Coca-Cola. 

GE's next chairman will have to exceed Mr. Welch's near-mythic 
accomplishments if GE is to continue to fly high.
Like Cisco, Intel, Wal-Mart, Nokia and any other company that is exploring 
the outer atmosphere, GE must struggle
ever harder to resist the laws that threaten to flatten the arc of success: 
the law of large numbers, the law of
diminishing returns, and the law of averages. 

-- The law of large numbers: Over the past decade GE's market value has 
multiplied eleven-fold -- to more than $560
billion from $50 billion at the end of 1990. Sustaining such a breathtaking 
pace of value growth gets progressively
harder as a company gets bigger. As the most valuable company on the planet, 
GE would need to grow its market
cap to nearly $3 trillion over the next five years to match the 42% 
compounded annual growth rate it has achieved
over the past half-decade. 

One way of escaping the law of large numbers is to divide big things into 
small things. One option for GE would be
to spin out its low-growth businesses as separate companies. Over the past 
five years, profits in two sectors --
appliances and plastics -- were essentially flat. Holding these businesses 
may generate a positive return on
invested capital, but no investor would keep them inside a growth portfolio. 
Why should GE? 

If GE's next chairman can't muster the courage to leave the dawdlers behind, 
perhaps he -- or she -- should spin out
the stars. Of the eight large business segments for which GE reports results, 
two -- GE Capital and NBC -- account
for nearly 50% of GE's five-year profit growth. Sure, GE Capital has 
benefited from its parent's dirt-cheap cost of
capital, but from an investor's point of view, these advantages may be more 
than offset by the drag of laggardly
earnings growth in other GE businesses. Looking beyond capital and 
broadcasting, there are probably a dozen
other high-growth candidates for spin-outs in GE's other sectors. 

Mr. Welch's successor shouldn't be afraid to disassemble GE. After all, the 
goal is not to make GE the "world's
most valuable company," but to make its shareholders the world's most richly 
rewarded. Shareholders don't care
whether GE's stock appreciates or whether it's the stock of companies that GE 
has disgorged. Breaking up is hard
to do. But Mr. Welch's successor may find that turning GE into the world's 
first $3 trillion company is even harder. 

-- The law of diminishing returns: Even the most successful strategies lose 
their potency over time. For most of Mr.
Welch's tenure, GE's strategies of choice have been cost cutting and 
acquisitions. From its unflinching approach to
downsizing in the mid-1980s, to its more recent dedication to e-business, Mr. 
Welch's GE has been imaginative
and unrelenting in excising waste. At the same time, GE's top line has been 
buoyed up by a tidal wave of
acquisitions -- more than 300 in the past three years, many outside the U.S. 

The payoff to all this cutting and deal making has been steadily accelerating 
earnings growth. Net earnings grew
10.8% in 1996, 12.7% in 1997, 13.3% in 1998 and 15.3% in 1999. Looking 
forward, power dieting and binge buying
may not be enough to keep GE's earnings escalator rising ever skyward. 

There are already signs that GE may be nearing the asymptotic end of the 
efficiency curve. Between 1981 and
1990, GE's revenue per employee increased by 187%. Yet over the last decade, 
revenue per employee grew by a
more modest 55%, and has been essentially flat since 1996. And while 
operating margins in GE's manufacturing
businesses have been steadily improving, GE's net profit margin, after all 
adjustments, has remained pretty much
unchanged over the past five years. 

What about acquisitions? While industry consolidation still has a way to run, 
particularly outside the U.S., it seems
inevitable that it will become harder and harder for GE to find under-priced, 
under-managed fixer-uppers. After all, at
the current furious pace of corporate coupling, the U.S. would be left with a 
single company by 2010. 

That leaves "e." E-commerce will drive new efficiencies into GE's business 
processes, but GE is not alone in
striving to e-enable its businesses. E-commerce is rapidly becoming an 
information technology arms race -- with
competitors making tit-for-tat investments to reap tit-for-tat efficiency 
gains. And while efficiency-besotted CEOs are
counting on the Internet to shrink procurement costs, savvy customers will be 
just as creative in using the Net to
beat down prices. Whether GE's enthusiasm for all things "e" produces 
long-lasting, peer-beating profit growth
remains to be seen. 

GE's next chairman may want to borrow a lesson or two from Enron, which has 
been voted America's most
innovative company five years running and displaced GE as the "best managed 
company" in Fortune magazine's
last "most admired" survey. Forty percent of Enron's $63 billion market value 
comes from businesses the company
wasn't even in three years ago -- all of them are homegrown. 

Forget acquisitions. With GE's powerful brand, global reach and fearsome 
capacity for execution, there's no reason
GE shouldn't surpass Enron as a business-building champ. It is entirely 
reasonable to expect that GE could create
10 to 20 new businesses over the next few years -- with each adding an 
average of $5 billion to GE's market value. 

Sooner or later GE is going to need an entirely new genre of wealth-creating 
strategies -- and a much more
aggressive commitment to internally generated new business development may 
well be the most promising
candidate. 

-- The law of averages: Over the past five years, GE's price/earnings ratio 
has tripled, from just over 16 to more than
48. The company is currently selling at a 65% premium to the market average 
P/E. But being a standout performer
for more than a few years at a time is a daunting challenge for any company, 
large or small. It seems that no
company can forever escape the steady tug of mediocrity. 

At the end of 1999, the Standard & Poor's 500 included 326 companies that had 
been in the index for the entire
decade. Fifty-five of these companies, among them GE, managed to deliver top 
quartile shareholder returns in as
many as four years out of the previous 10. GE's top quartile results came in 
1996, 1997, 1998 and 1999. If GE's
new chairman manages to extend this streak for another four years, GE will 
set a new world record, for none of the
326 S&P veterans achieved top quartile returns in as many as eight years out 
of 10 during the '90s, and only four
companies -- Oracle, Home Depot, Intel and Cisco -- cleared the bar seven 
years out of 10. 

If GE can fire up the entrepreneurial spirit in each of its employees, it 
just might beat the odds. Like most large
companies, GE seems to be reluctant to encourage employees to start new 
businesses by giving them equity
stakes in new ventures. While this isn't the only way to build businesses, 
it's one that can't be ignored in a world
where talented employees are often lured away by the promise of a big chunk 
of equity in a start-up. GE already
invests in start-ups via GE Equity -- to the tune of $1.5 billion in 1999. 
Last year GE also repurchased $1.9 billion of
its own stock. One wonders just what kind of new wealth GE's own employees 
might have been able to create if
they had been backed by this kind of capital? 

To have any hope of escaping Mr. Welch's shadow, and matching his success, 
GE's next chairman will have to
keep a simple truth in mind: If you're trying to achieve unprecedented ends, 
you're going to need unprecedented
means. A break-up, a few major spin-outs, a bottom-to-top initiative focused 
on making GE as good at creating bold
new businesses as it is at improving existing businesses, an absolute 
commitment to doubling or tripling GE's
internal growth rate -- these are all potential candidates for the next big 
thing at GE. 

Maybe, just maybe, GE will continue to fly high with its current success 
recipes. One could argue that as long as
there are companies around the world that aren't as well-managed as GE, Mr. 
Welch's magnificent buy-and-improve
engine will have plenty of fuel. Or that GE's Web-smitten executives will 
discover Net advantages no one else has
yet dreamed of. 

After 20 years under Mr. Welch, GE is habituated to meeting new challenges. 
Moreover, GE has a long history of
organizational and managerial innovation -- it was among the first to 
decentralize along business unit lines, embrace
disciplined strategic planning, delayer its hierarchical organization, and 
commit itself to becoming Webified from
stem to stern. Like the Internet, GE is diverse, global, flat, meritocratic 
and non-hierarchical. 

Maybe all of this will help GE to become one of the first companies to marry 
the rule-busting, business-building
ethos of the "new economy" with the "old economy" virtues of scale, 
efficiency and quality. If GE succeeds, there
will be no more talk of new economy and old economy, for GE will have managed 
to create a perfect synthesis of
old and new. And the most perfectly developed specimen of the industrial age 
will have become the archetype for
the post-industrial corporation -- a company that uses its size and 
operational excellence to crush the upstarts, and
its industry-transforming innovation to constantly surprise the old farts. 
This is a worthy, and necessary, aspiration
for the next leader of America's pre-eminent corporation. 


Mr. Hamel is chairman of Strategos, a consulting company based in Menlo Park, 
Calif. He is author of "Leading the
Revolution" (Harvard Business School Press, 2000).




Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 



Spiraling energy costs creating near-crisis situation 
The heat is on consumers 
Monday, September 17, 2000

By DAVID IVANOVICH 
Copyright 2000 Houston Chronicle Washington Bureau 

http://www.chron.com/cs/CDA/printstory.hts/topstory/670583


Abreast of the Market
S&P Index Seemed Tranquil This Year, but...
By E.S. Browning
Staff Reporter of The Wall Street Journal

09/18/2000
The Wall Street Journal
C1
(Copyright (c) 2000, Dow Jones & Company, Inc.)

Amid the storm that has swept the Nasdaq Composite Index this year, the 
Standard & Poor's 500-stock index
looks like a sea of tranquility. 

Since Jan. 1, it has gone almost exactly nowhere, starting the year at 
1469.25 and closing Friday at 1465.81.

But beneath the quiet surface, a furious battle is raging among the S&P's 
components, with some of last year's
losers becoming this year's winners. 

Some of the most amazing performers are the natural-gas companies, which are 
up about 70% as a group so far
this year. "The natural-gas index looks like an Internet stock from a year 
ago," says Richard Bernstein, chief
quantitative strategist at Merrill Lynch. 

El Paso Energy is up 70% so far this year. KeySpan Energy is up almost 60%. 
On top of its stock gain, KeySpan
offers something some investors aren't familiar with: a 5% dividend. 

Now the big question is, should investors be plowing their money into the 
recent winners, which also include drug
stocks, brokerage-firm stocks and bank stocks? Or is their surge a flash in 
the pan that will evaporate as investors
get over their jitters in the fall? 

Higher oil prices helped send utility stocks up on Friday, and most other 
stocks down. The Dow Jones Industrial
Average fell 1.45%, or 160.47 points, to 10927.00, leaving the blue-chip 
index down 2.62%, or 293.65 points, for the
week. 

The Nasdaq Composite Index was down 2.01% on the day and 3.6% on the week. 
The Dow Jones Utility Average,
however, rose 1.52%, or 5.94 points, on Friday to a record 397.04, leaving it 
up 2.78% on the week. 

The S&P 500, still the broadest of the major market indexes, dropped 1% on 
Friday. But it is just 4% off its record
of 1527.46, set March 24. In contrast, the technology-heavy Nasdaq index is 
down 24% from its March 10 high. 

Within the S&P 500, though, there have been some dramatic moves. Utilities 
are up an astounding 40%, just in the
time since the S&P peaked on March 24, according to Ned Davis Research. 
Financials and drug stocks are up
about 16% each -- again, since the S&P hit a record. 

Communications stocks, on the other hand, have fallen 25% in that period. The 
S&P 500's big tech stocks are
down more than 19%. 

Some analysts think the move that is under way is broader than a sector 
rotation. Some of the least-wanted stocks
of 1999 have become desirable this year. As huge stocks, such as Qualcomm and 
Yahoo!, have sagged, smaller,
once-neglected S&P companies, such as Reebok and Allied Waste, have soared. 

The switch can be seen in an index called the Value Line Arithmetic Index. 
That index tracks about 1,700
companies and doesn't give any extra weight to the ones with a larger market 
value. It is a closer reflection of the
average company, rather than the biggest companies. 

So far this year, it is up 13%, eclipsing the S&P 500. The S&P 500 is 
weighted according to its members' market
value, which means that it is dominated by the larger stocks. The Value Line 
index's strength compared with the
S&P 500 is a clear indication that some of the smaller stocks are making a 
comeback, at least for now. 

Some of the gains do seem to reflect special circumstances. Utilities have 
been helped by an explosion in
natural-gas prices and by a search for stable investments in a turbulent 
stock market. Many banks and brokerage
firms have benefited from takeover speculation: Merrill Lynch is up 66% so 
far this year; Lehman Brothers is up
69%. 

If takeover expectations fade, the brokerage stocks risk a slide. And energy 
companies depend on oil and gas
prices, which can make them volatile. Natural-gas bulls note, however, that 
natural-gas prices are expected to
remain high for some time, which could keep propelling that group ahead. 

"Very few people thought energy prices would remain this high for as long as 
they have," notes Donaldson, Lufkin &
Jenrette investment strategist Thomas Galvin. "So you still have people 
underweighted both areas, energy and
utilities." 

That means that there still are plenty of skeptics out there. If gas prices 
stay high, the stocks have room to rise as
skeptics are won over. 

But the real trick during the coming months may not be to be in the right 
sector, but to be in the right stock, both
men say. 

At a time when the economy is slowing and earnings growth will be more 
difficult, "you probably want higher-quality
stocks, because they have more stable earnings," Mr. Bernstein says. 

When tech stocks or utility stocks are in favor, it is enough to buy a stock 
from the group and your stock will go up.
Now investors need to be more selective. 

"El Paso and Duke Energy are extremely well managed," says Mr. Galvin, "as is 
Enron. But the rising tide in
utilities has lifted all boats, and not all utilities are well enough managed 
to take advantage of all opportunities." 

The key is choosing the stocks that will withstand the more difficult times 
to come, and that won't be easy. People
who bought Intel or Oracle at the start of this year probably feel as if it 
wasn't that bad a year for tech. Both, despite
a recent sag, still are up almost 40% this year. Those who chose Microsoft or 
Dell, however, took a bath: Microsoft
is down 45% since the year began, and Dell is down almost 30%. 

Mr. Galvin thinks tech stocks will stage a fourth-quarter rally, as investors 
look for companies that can continue to
build profits in a slowing economy. He points out that analysts expect tech 
to post 38% earnings growth next year,
only a bit less than this year's 41%. But benefiting from any rally would 
require picking the stocks that will have the
good earnings. 

Another way of looking at the uncertain future, says Bob Bissell, president 
of Wells Capital Management, is that
there could be some unexpected events. Companies whose stock prices have 
fallen could be acquired, or forced to
restructure, which could provide a payoff for investors. 

"I am thinking of companies like AT&T," he says. "Something has got to give 
there. The stock is down to the low
30s," 47% down from its 52-week high of 61. "Something has got to happen. Do 
you fragment the company?" 

He also points to midcap stocks, another of the year's strongest performers. 
"I call the category `the forgotten
prince,' " he says. The S&P Midcap 400 index is doing even better than the 
Value Line index, up 22% since the
year began. 

Some midcap companies deserve to be forgotten, of course. But the index also 
contains some smaller banks that
could be takeover targets, and it has some fast-growing tech companies too. 
"It is getting stronger as the
technological revolution moves companies rapidly from smallcap to midcap," 
Mr. Bissell says. 

--- 

Friday's Market Activity 

Soaring energy prices knocked market averages sharply lower. 

American Express lost $1.50 to $59.31, Chase Manhattan dropped 1.66 to 49, 
and General Electric, which has an
exposure to the group through its financial-services operations, gave up 2.13 
to 56.69. 

The group also suffered from a cooling in takeover speculation. Lehman 
Brothers, for example, fell 8 to 142.50,
Goldman Sachs lost 4.25 to 124.75 and Bear Stearns gave up 4.75 to 65. 

Higher oil prices helped Exxon Mobil rise 3.60 to 88.88. It reached a 52-week 
high, its first since Dec. 9, while
Amerada Hess climbed 4.56 to 73.25, and touched a 52-week high of its own. 

Database software company Oracle (Nasdaq) fell 6.63 to 78.31, with 60 million 
shares changing hands. Despite
Oracle's announcement of strong quarterly earnings Thursday after the end of 
normal trading, some analysts said
they were disappointed with the company's revenue growth. 

Siebel Systems (Nasdaq), an Oracle competitor, added 4.19 to 99. However, i2 
Technologies fell 3.69 to 172.19,
while Ariba lost 5.13 to 152.44, both on Nasdaq. 

Red Hat (Nasdaq) lost 4.06 to 21.19. The Research Triangle Park, N.C., 
developer of open-source software products
posted a narrower-than-expected second-quarter loss, but left some analysts 
disappointed. 

Avon Products eased 50 cents to 41.19. The New York beauty-products marketing 
concern said late Thursday the
Securities and Exchange Commission is investigating a $10 million charge the 
company took in 1999 related to the
write-off of computer software. 

Adobe Systems (Nasdaq) moved up 7.25 to 132.63. The San Jose, Calif., 
software developer reported fiscal
third-quarter earnings that topped forecasts. 

Maytag fell 2.19 to 33.63, after the Newton, Iowa, home-appliance maker 
warned about second-half earnings. 

Ivax rose 2.38 to 43.63. The Miami pharmaceutical maker received final 
approved from the Food and Drug
Administration for its generic equivalent of Bristol-Myers Squibb's cancer 
drug Taxol. 

Carnival Corp. gained 1.75 to 22.88, while rival Royal Caribbean Cruises 
advanced 1.75 to 24.50. The stocks rose
on hopes that the withdrawal from the market of a smaller competitor will 
ease excess capacity.




Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


                                                                              
      
Politics & Policy
The Homestretch
By Gerald F. Seib

09/18/2000
The Wall Street Journal
A40
(Copyright (c) 2000, Dow Jones & Company, Inc.)

The Gore and Bush campaigns will argue over which did better in the debate 
over debates, but one winner is clear:
PBS news anchor Jim Lehrer. Not only will he moderate all three presidential 
debates sponsored by the bipartisan
Commission on Presidential Debates, but, under an agreement completed over 
the weekend, he will do so under
rules giving him more flexibility than ever before. He will be free to bore 
in on a specific subject and extend
discussion of it, rather than simply move on to other questions as in the 
past. Under the debate agreement, the two
candidates will stand behind lecterns at the opening debate Oct. 3, sit 
around a table in talk-show fashion on Oct.
11, and debate in a town-hall format on Oct. 17. 

In other campaign developments:

-- Housing policy? In the closest thing yet to a campaign debate on housing 
issues, the Republican party's Web
site is trying to entice listeners to dial in to radio talk shows and charge 
that Democrats are running "The Slumlord
Ticket." Why? On top of a recent controversy over complaints by tenants of a 
rental house in Tennessee owned by
Vice President Gore, the Web site touts the story of a similar headache now 
faced by running mate Joseph
Lieberman. An immigrant mother was evicted when she was injured and fell 
behind in rent payments at a property
owned by the estate of Mr. Lieberman's wealthy late uncle; Mr. Lieberman is 
executor of the estate. 

-- A fish story: To the list of the perils of holding public office, now add 
the danger of flying fish. Just ask Rep. Helen
Chenoweth-Hage, an Idaho Republican, who was pelted with rotting salmon 
thrown by a 20-year-old protester at a
hearing on Western wildfires held in Montana over the weekend. The protester 
cried out that the conservative
congresswoman is "the greatest threat to the forest" and uncorked the salmon. 
She wasn't hurt, but the Associated
Press reports that "the hearing was recessed while she cleaned salmon from 
her hair and jacket." 

--- Money Watch

Top "double givers" -- donors of soft money to both parties


In millions

DONOR DEMOCRATS REPUBLICANS TOTAL

AT&T $1.1 $1.8 $2.9
Microsoft 0.8 1.0 1.8
Enron 0.4 1.2 1.7
Freddie Mac 0.6 1.0 1.5
Philip Morris 0.2 1.4 1.5
SBC Comm. 0.7 0.5 1.2
America Online 0.6 0.6 1.2

Source: Common Cause




Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

                    

GE Tops Fortune's Ranking of the World's Most Admired Companies; Key To 
Staying Ahead of the Pack Is Innovation

09/18/2000
Business Wire
(Copyright (c) 2000, Business Wire)

NEW YORK--(BUSINESS WIRE)--Sept. 18, 2000--For the third straight year, 
General Electric, on the strength of its
management team and innovative global strategy, is No. 1 on FORTUNE's ranking 
of the most admired companies
in the world. FORTUNE's third annual list of Global Most Admired Companies 
consists of 379 companies in 27
industries, with 25 selected as "all-stars" for exemplifying leadership on a 
global scale. Cisco Systems came in at
No. 2 on the all-star ranking (up from No. 8 in 1999); other repeat 
performers in the top ten include Microsoft, whose
battles with government regulators on one flank and perceptions of a 
foundering Internet strategy on the other
caused it to slip to No. 3 from No. 2; Intel (No.4); and Wal-Mart Stores, 
which moved up to No. 5 from No. 7. The
complete list of FORTUNE's Global Most Admired Companies appears in the 
October 2 issue of FORTUNE and is
available at www.fortune.com as of Monday, Sept.18, at 8:30 a.m. 

According to Nicholas Stein's article, "The World's Most Admired Companies," 
the schizophrenic market conditions
of the past year offer one reason why the Most Admired list looks so 
different this year. As Stein writes: "The
winners are companies that demonstrated a new-economy style growth strategy 
while maintaining an old-economy
approach to fiscal responsibility." And, as Vicki Wright, global managing 
director of the Hay Group consultancy that
helped produce the list with FORTUNE notes: "There is something new this year 
in how we perceive companies. It
is the emphasis on how much companies are capable of looking forward. In a 
year when old-economy companies
have not seen their share price perform, those that have managed to weather 
both the old- and new-economy
storms will flourish."

Notable changes among this year's Global Most Admired list include Home Depot 
leaping from No. 20 to No. 9,
Toyota moving up from No. 16 to No. 10, and Citgroup advancing from No. 25 to 
No. 18. Strong demand for Sony's
flat-screen TVs, digital cameras, and PlayStation game consoles helped the 
company move up from 14 to 6.
Newcomers to this year's list -- Enron, Nokia, Charles Schwab, UPS, and 
Goldman Sachs -- all embody business
strategies that bridge the old and new economic worlds. Companies that lost 
their all-star status -- IBM,
Hewlett-Packard, AT&T, Procter & Gamble, DaimlerChrysler -- have been plagued 
with difficulties integrating new
business concepts. 

Many of the industry categories also experienced significant turnover. Among 
airline companies, Singapore Airlines,
which didn't even make last year's list, took the top spot from Southwest. 
British Airways, hobbled by internal
conflict and heightened competition, fell from third to seventh. Though Intel 
held on to the top ranking in the
computer hardware and software category, Sun Microsystems rode the dot-com 
revolution to second place, up from
sixth last year, while Dell, facing a wireless (and PC-less) future, fell 
from fifth to eighth. And in the white-hot
network communications and Internet technology sector, all-star newcomer 
Nokia edged Cisco Systems for top
billing. 

To find out what unique management qualities set these companies apart from 
their peers, the Hay Group surveyed
the Most Admired Companies and their less admired peers about the performance 
measures they use to chart the
progress of their companies. 

According to their findings, Most Admired companies set more challenging 
goals, link the compensation of their
executives more closely to the completion of those goals, and are generally 
more oriented toward long-term
performance. 

To complete the list of the world's most admired companies, FORTUNE consulted 
the experts: the business
executives who run companies, and the analysts who study them. Global 
companies were rated according to eight
criteria: quality of management; quality of products or services; 
innovativeness; long-term investment value; financial
soundness; ability to attract, develop and retain talent; community 
responsibility; and use of corporate assets. To
reflect this list's international scope, a ninth category was added: global 
business acumen. A company's overall
ranking is the average of the scores of all nine attributes. Companies are 
ranked within their industry, and the top 25
-- the All-Stars -- are culled from across all industry groups. 


The October 2 issue is available on newsstands beginning September 25. For 
more information, or to schedule an
interview with a FORTUNE writer or editor, contact Nyssa Tussing at 
212/522-6724. 
The 2000 FORTUNE Global Most Admired All-Stars

2000/1999 Company Industry
Rank

1/1 General Electric Electronics, electrical equipment
2/8 Cisco Systems Network Commun., Internet Tech.
3/2 Microsoft Computer hardware, software
4/4 Intel Computer hardware, software
5/7 Wal-Mart Stores Retail: general, specialty
6/14 Sony Electronics, electrical equipment
7/9 Dell Computer Computer hardware, software
8/NR Nokia Network Commun., Internet Tech
9/20 Home Depot Retail: general, specialty
10/16 Toyota Motor Motor vehicles
11/22 Southwest Airlines Airlines
12/11 Lucent Technologies Network Commun., Internet Tech.
13/NR Goldman Sachs Securities, diversified financials
14/5 Berkshire Hathaway Insurance: property, casualty
15/3 Coca-Cola Beverages
16/NR Charles Schwab Securities, diversified financials
17/17 Johnson & Johnson Pharmaceuticals
18/25 Citigroup Securities, diversified financials
19/15 Ford Motor Motor vehicles
20/13 Pfizer Pharmaceuticals
21/10 Merck Pharmaceuticals
22/21 Walt Disney Entertainment
23/19 American Express Securities, diversified financials
24/NR United Parcel Service Mail, pkg., freight delivery
25/NR Enron Energy transmission providers

NR = not ranked in 1999


CONTACT: FORTUNE, New York Nyssa Tussing, 212/522-6724 

08:33 EDT SEPTEMBER 18, 2000



Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.