For Dave Cote, success is coated with Honeywell International Inc (NYSE:HON)
The Chief Executive Magazine has selected Dave Cote, Honeywell International Inc (NYSE:HON)’s Chairman and CEO, as “CEO of the Year”. This honor recognizes the manner in which the company has transformed over the last decade, under Cote’s leadership. In this period, the company’s sales rose by 71% to $37.7B, the earnings per share rose by 197% to $4.48, and the total shareowner return was 240%. Over that period, HON has been a consistent out-performer and today it is a global entity. 54% of Honeywell’s sales come from outside the United States in comparison to the 41%, a decade ago.
Since 2003, the company has made over 75 acquisitions as well as 50 divestitures and built excellent positions in great industries across the globe. It has focused on seed planting and re-invested in its businesses, services and products and it has paid rich dividends.
What is seed planting/seed capital?
Most businesses require seed capital to get off the ground. It is considered a pretty high-risk investment. However, it has the capacity to reap rich benefits if the company is able to build on its potential and transition into a growth enterprise. This kind of funding is generally obtained in lieu of an equity stake in the company. But it has a far less formal-contractual overhead than any other standard equity financing.
On the whole, venture capital investors and banks view seed-capital as a risky investment that the promoters of any new venture, opt for. It represents a tangible and meaningful commitment on their part to make their business a success.
The perfect mix
Very often, capital providers prefer to wait it out till a business reaches a certain level of maturity before they dive a little deeper and make larger investments. These kinds of investments typify an early-stage financing of venture-capital funding. For well-grounded companies such as Honeywell International Inc (NYSE:HON), it is always a mix-and match of seed planting and prudent re-investments that can eventually bear fruit. For Dave Cote, the journey has been a fruitful one and he is being recognized for his consistency and his leadership abilities in an industry where cut-throat competition is the norm.