Morningstar Names John Martin of Gilead Sciences as its 2014 CEO of the Year

CHICAGO, Jan. 21, 2015—Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today named John Martin of Gilead Sciences the recipient of its 2014 CEO of the Year award. Each year Morningstar recognizes a chief executive who exhibits commendable corporate stewardship, demonstrates independent thinking, creates lasting value for shareholders, and has put his or her stamp on an industry. Gilead Sciences is a research-based biopharmaceutical company that discovers, develops, and commercializes innovative medicines in areas of unmet medical need.

The two other nominees for Morningstar's 2014 CEO of the Year award were Gregory Henslee of O'Reilly Automotive and Gail Kelly of Westpac Banking Corporation.

"Each of our three nominees lead companies that have an Exemplary Stewardship Rating, the highest rating our equity analysts assign based on their assessment of management's investment decisions," Michael Holt, head of equity research for Morningstar, said. "While this rating isn't a requirement to become CEO of the Year, it does speak to the capital-allocation skills possessed by this year's group of finalists.

"We selected Mr. Martin, who was also a 2013 nominee, as this year's winner for the tremendous growth he has led during his 18-year tenure at the firm, including a 100-fold increase in Gilead's stock price. Shareholders saw a 157 percent gain over the past two calendar years, versus a 122 percent return for the Nasdaq biotech index and 50 percent return for the SandP 500. Under Martin's leadership, Gilead's competitive advantages have strengthened to earn the firm Morningstar's Wide 'Economic Moat' rating, which is supported by an excellent acquisition track record and a long runway for key patents."

Martin, with more than a quarter-century of industry experience, has proved himself a talented leader and strong steward of shareholder capital during his tenure:
• Gilead established a leading position in the Human Immunodeficiency Virus (HIV) market with novel product-combination regimens; the company serves about 85 percent of treated HIV patients in the United States with its patented products.
• Gilead has shown that it can translate its extensive understanding of the drug discovery and development process to new therapeutic areas, including hepatitis C and potentially other liver-related indications or oncology, allowing it to earn a wide moat. With a small salesforce, inexpensive manufacturing, and selective research and development (RandD), Gilead also generates stellar profit margins with its convenient, effective, and safe treatments in an industry with plentiful competitors.
• Investor reaction to Gilead's $11 billion Pharmasset acquisition in early 2012 was mixed because of the steep price, but the deal brought Gilead rights to hepatitis C drug Sovaldi, which saw record-breaking sales of $8.5 billion in the first three quarters of 2014. Sovaldi's significant cash flows support Gilead's pipeline progress and its share repurchase program, which has been value-accretive for shareholders.

Morningstar's Economic Moat™ rating is a proprietary measure of a company's sustainable competitive advantages, and Morningstar assigns each company a rating of Wide, Narrow, or None. A company can derive an economic moat through five primary sources: Efficient Scale (a limited market where there is little incentive for new entrants), Network Effect (a situation where incremental customers add value for existing customers), Cost Advantage (allowing a company a greater profit margin and/or the ability to steal market share), Intangible Assets (e.g. patents or strong brands), and Switching Costs (making it costly in time and/or money for customers to switch providers). The Morningstar Stewardship Rating for stocks identifies a firm's stewardship as Exemplary, Standard, or Poor.

For Morningstar's commentary about Martin, please visit The complete list of past winners is available at

Morningstar introduced its CEO of the Year award in January 2000. Winners are chosen by senior members of Morningstar's equity analyst team based on their in-depth independent research; the criteria are available here. For more information about the Morningstar Awards, please visit

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 479,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 13 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $169 billion in assets under advisement and management as of Sept. 30, 2014. The company has operations in 27 countries.

The company references above should not be considered a solicitation by Morningstar to purchase shares of those companies.

# # #