Big Players Beyond the List : Many of the state’s largest companies are privately held or are branches of foreign firms, which excludes them from these rankings.

If something seems missing from these pages and pages of lists and charts, you’re right.

By definition, the act of compiling a list of California’s largest and most successful publicly held businesses cannot include two broad categories of companies: privately held businesses and the subsidiaries or operations of foreign and domestic companies.

Private companies do not have to disclose financial details--indeed, that is often a key reason they do not go to the public stock markets to raise money. And although foreign and domestic companies do have reporting requirements, they rarely voluntarily break out much information on their California branches.

Nonetheless, in both cases these “missing” companies include operations of significant size, importance and consumer recognition. In many instances such businesses, if they were stand-alone publicly traded companies, would surely be fixtures on one or more of the lists printed here.

Which companies are we talking about? How about the privately owned Bechtel Group, one of the world’s largest private engineering and construction companies, whose $7.9 billion annual sales for 1994 would surely place it among the top 20 of The Times Sales 100? Or Levi Strauss, the company that dates from the California Gold Rush and whose blue denims are an icon of Americana throughout the world? Its 1994 sales of $6.1 billion would place it among the state’s top 25 in annual revenue.

Or Packard Bell, manufacturer of one of the top-selling lines of personal computers with 1994 sales of $3 billion? E&J; Gallo Winery, the state’s largest family-owned winemaker with annual estimated sales of $1 billion? And the Irvine Co., owner of one-sixth of Orange County and the largest private landowner in the state, whose 1994 sales have been estimated at more than $750 million?

Foreign-owned businesses in California include Silicon Systems, a Tustin semiconductor manufacturer controlled by TDK of Korea; La Costa Hotel & Spa, a luxury resort near San Diego owned by a Japanese firm; and Fireman’s Fund, the state’s largest insurance company, now owned by a German insurer.

In addition, Japan’s top three auto makers, Toyota, Honda and Nissan, all have huge facilities in California, as befits the state with the largest number of cars and drivers.

At the same time, California is home to large numbers of people who work for companies whose headquarters are outside the state, including IBM, AT&T;, General Motors and Ford. In fact, several of the region’s largest aerospace employers are, thanks to mergers, now subsidiaries of out-of-state companies. McDonnell Douglas is headquartered in St. Louis; Lockheed Martin calls Maryland home; and Hughes is now part of Michigan-based GM.

California-headquartered companies are an impressive lot, as this section shows. But these other kinds of companies add significantly to the diversity, depth and strength of the state’s economy.

An understanding of the state’s economy requires a grounding in the role played by private concerns.

All told, according to one accounting, privately held companies in the United States employ more workers than all the companies on the major stock exchanges combined. (This was true in 1993, when the count was taken, and can only be more true today, after huge corporate layoffs that have not only cut these companies’ employment rolls but have also forced tens of thousands of people into self-employment.)

What are the key distinctions between publicly traded and privatelyheld companies?

It all comes down to differences in their ownership structures: Publicly held companies have shares, which are a form of ownership stake, that are available for sale to the public; privately held companies may have shares and shareholders, but that stock is not available to the public.

This difference determines how companies can raise money and how they must report their business activities and finances, both to their shareholders and to the various government agencies regulating them.

In exchange for the right to sell shares in the stock markets, public companies are required by the Securities and Exchange Commission to keep their shareholders up to date on their operations so investors have a reasonable chance of tracking their holdings.

The disclosures required include timely filings of quarterly and annual reports; reports of significant changes of ownership of company shares; and reports of any information deemed “material” to the stock’s value, such as a change in key personnel, the loss or gain of a critical supplier or customer, or a significant swing in the company’s inventory.

In addition, executives and major shareholders of publicly traded companies are limited in their ability to buy and sell their shares in the open market, a restriction aimed at reducing the potential for these key players to benefit from their knowledge of a company’s operations.

Not surprisingly, many entrepreneurs chafe at these requirements, electing to keep their companies privately held--or, in a significant number of cases, to buy back their publicly held shares and take their companies private.

Private ownership shields companies from stock market pressures and allows them to maintain greater confidentiality about their operations. They may enjoy tax advantages and a freer hand in restructuring their operations as well.

Several large privately held California companies used to be public, including Levi Strauss, Ralphs Grocery, Stater Bros. and Parsons.

Parsons, a Pasadena construction engineering firm, was taken over by is employees in 1985 because the company decided its stock price did not adequately reflect the value and potential of its operations.

In the case of Levi Strauss, descendants of the company’s founder decided in 1985 to return the company to family control, through a $2-billion stock buyback. The reasons offered at the time included a desire to allow management to focus on long-term goals and keep true to its traditional values. However, the deal also allowed family members to pull out $340 million in cash for their personal use, in effect allowing them to exchange their equity in the company for cash just as other shareholders were compensated for their holdings during the buyback. The company continued to award stock to employees, however, which required some SEC filings.

But earlier this year, Levi Strauss went further, announcing that it would buy back stock held by employees and some members of the founding family, becoming even more closely held than before.