The mice that roar

There are few really obvious messages from the release of BRW Magazine’s Executive Rich list, which measures Australia’s richest executives according to the size of the shareholdings.

Firstly, the rich are back in a spectacular way.

The total wealth held by the 200 executives on the list jumped almost $15 billion to $35 billion. Almost every member of this list saw their wealth increase; just eight fell, and several of those were because of share sales.

Secondly, Rupert Murdoch remains a force to be reckoned with.

In the last 12 months, when media businesses have been under severe pressure – and Murdoch, through some false moves such as his MySpace acquisition, has been under more pressure than most – Murdoch has seen the value of his shareholding in News Corporation increased by $2.6 billion to just under $6 billion.

Doubts might linger on a number of parts of his empire (particularly anything that involves newsprint) but that’s an impressive effort.

Thirdly, the list shows that fortunes can still be made in an extraordinarily short period, even in an environment where the economy is hardly firing on all cylinders.

For proof of this, look no further than the spectacular debut on the list of David Teoh, the founder of internet service provider TPG. He joins the list in 12th place with a fortune of $487.8 million.

Yes, markets have performed well in the last 12 months (the ASX 200 is up 52%) but Teoh’s effort is simply amazing. Shares in TPG have climbed more than 10-fold, from just 21c to $2.25.

It’s natural to look at that sort of increase and think it might be overdone, but remember that TPG has been transformed in the last two years through the acquisitions of SP Telemedia in 2008 and more recently PIPE Networks.

TPG is now a very serious player in Australia’s internet sector.

And finally, the list also shows that smaller companies can produce very wealthy executives.

Take 1300 Smiles for example, a Queensland-based company that runs 18 dentist clinics in that state. The company posted a 5.6% increase in revenue for the first half of the 2009-10 year to $11.6 million and has a market capitalisation of $61 million – a reasonable sized company, but by no means a giant.

Managing director and major shareholder Daryl Holmes made his debut on the executive rich list last year with a fortune of $40 million. This year, he’s up to $44 million.

Which goes to show that an SME with the right story and the right growth strategy can be richly rewarded.