In a controversial article in the Jan/Feb (2010) issue of the Harvard Business Review, Morten Hansen, Herminia Ibarra and Urs Peyer compiled the first ever ranking that shows which CEO’s performed best over their entire time in office – or, for those still in the job, up until September 30th 2009,
To create their ranking they identified all the CEO’s of all publicly traded companies that made the Standard & Poor’s Global 1200 or BRIC 40 lists since 1997. To be included a CEO had to have assumed the job no earlier than January 1995 and no later than December 2007.
To calculate the rankings they assessed the daily company returns for each CEO for the entire length of tenure or until the 30th September 2009. They calculated three performance indicators, (1) the country adjusted company returns; (2) the industry adjusted company returns; and (3) the market capitalisation change. The logic for the three performance indicators over the tenure was to give a more balanced approach.
They identified 1,999 CEO’s world wide making the criteria, and assessed them as follows;
1) Steve Jobs – Apple (1997 – present). Information Technology (USA). Market capitalisation change $150 billion.
2) Yun Jong-Yong – Samsung Electronics (1996 – 2008). Information Technology (South Korea). Market capitalisation change $127 billion.
3) Alexey Miller – Gazprom (2001 – present). Energy (Russia). Market capitalisation change $101 billion.
4) John Chambers – Cisco Systems (1995 – present). Information Technology (USA). Market capitalisation change $152 billion.
5) Mukesh Ambani – Reliance Industries (2002 – present). Energy (India). Market capitalisation change $72 billion.
6) John Martin – Gilead Sciences (1996 – present). Health Care (USA). Market capitalisation change $39 billion.
7) Jeffrey Bezos – Amazon.com (1996 – present). Retail (USA). Market capitalisation change $37 billion.
8) Margaret Whitman – eBay (1998 – 2008). Retail (USA). Market capitalisation change $37 billion.
9) Eric Schmidt – Google (2001 – present). Information Technology (USA). Market capitalisation change $101 billion.
10) Hugh Grant – Monsanto (2003 – present). Materials (USA). Market capitalisation change $35 billion.
The reason you don’t see names such as Bill Gates, Jack Walsh, Larry Ellison, and Warren Buffet, is that they all assumed their CEO roles before 1995, (though the authors feel they would have done well if included).
What’s interesting is that the top 50 increased the wealth of their companies’ shareholders by $48.2 billion (adjusted for inflation, dividends, share repurchases, and share issues); compared to the bottom 50 who produced a loss of $18.3 billion in shareholder value over their tenure, (p.107).
Some other interesting facts from their assessment include;
The median age at which these executives became CEO’s was 52.
Only 1.5% are women.
Only 15% of the CEO’s worked for companies that were situated outside of their country of birth.
16 countries are represented in the top 50.
14 of the top 50 had MBA’s.
12 of the top 50 were recruited from outside the organisation.
Compared to the Barron’s list which is compiled through discussions with investors, analysts and executives, five executives appeared in the Barron’s list and the top 30; Steve Jobs (Apple); John Chambers (Cisco); Jeff Bezos (Amazon); Hugh Grant (Monsanto) and Terry Leahy (Tesco).
The controversy comes from a variety of angles. For example, questions were raised about the validity of Alexey Miller at number three, and the circumstances under which this company generates such large returns. Also questions were asked about non-profit and SME organisations, but then they wouldn’t meet the criteria under which this analysis was conducted. Other questions were around why someone’s ‘favourite’ leader wasn’t on the list.
However, whether ones favourite isn’t in the top 10, or one disagrees with their ranking criteria, what we shouldn’t disagree with is their closing statement, where they conclude that “only by analysing performance over their tenure and beyond can we begin to understand the nature of great leadership,” (p113).
Those who were ranked 11th to 50th were; (11) Robert Tillman (Lowe’s – USA); (12) William Greehey (Valero Energy – USA); (13) Gareth Davis (Imperial Tobacco – UK); (14) William Doyle (PotashCorp – Canada); (15) Benjamin Steinbruch (Companhia Siderurgica Nacional – Brazil); (16) Bart Becht (Reckitt Benckiser Group – UK); (17) Masahiro Sakane (Komatsu – Japan); (18) Terry Leahy (Tesco – UK); (19) John Thompson (Symantec – USA); (20) Graham MacKay (SAB Miller – UK); (21) Mikael Lilius (Fortum – Finland); (22) Mikhail Prokhorov (Norilsk Nickel – Russia); (23) Mark Papa (EOG Resources – USA); (24) C. John Wilder (TXU – USA); (25) Frank Chapman (BG Group – UK); (26) Paul Chisholm (Colt Telecom Group – UK); (27) David Snow, Jr. (Medco Health Solutions – USA); (28) Tomeo Kanbayashi (NTT Data – Japan); (29) Chung Mong-Koo (Hyundai Motor – South Korea); (30) John Lau (Husky Energy – Canada); (31) Stanley Fink (Man Group – UK); (32) Antoine Zacharias (Vinci – France); (33) Juan Villalonga (Telefonica – Spain); (34) Harry Roels (RWE – Germany); (35) Charles Goodyear (BHP Billiton – UK); (36) Matteo Arpe (Capitalia – Italy); (37) Florentino Perez (Group ACS – Spain); (38) Fujio Mitarai (Canon – Japan); (39) Roy Gardner (Centrica – UK); (40) Thierry Desmarest (Total – France); (41) Wang Jianzhou (China Mobile – China); (42) Fu Chengyu (CNOOC Ltd – China); (43) Mark Pigott (Paccar – USA); (44) William Osborn (Northern Trust – USA); (45) Craig Donohue (CME Group – USA); (46) David Simon (Simon Property Group – USA); (47) Larry Glasscock (WellPoint – USA); (48) AJ Scheepbouwer (Royal KPN – Netherlands); (49) Fred Kindle – (ABB – Switzerland); (50) David Pyott (Allergan – USA).
To view the top 100 and access a list of the top 200, go to http://www.hbr.org/top-ceos
To create their ranking they identified all the CEO’s of all publicly traded companies that made the Standard & Poor’s Global 1200 or BRIC 40 lists since 1997. To be included a CEO had to have assumed the job no earlier than January 1995 and no later than December 2007.
To calculate the rankings they assessed the daily company returns for each CEO for the entire length of tenure or until the 30th September 2009. They calculated three performance indicators, (1) the country adjusted company returns; (2) the industry adjusted company returns; and (3) the market capitalisation change. The logic for the three performance indicators over the tenure was to give a more balanced approach.
They identified 1,999 CEO’s world wide making the criteria, and assessed them as follows;
1) Steve Jobs – Apple (1997 – present). Information Technology (USA). Market capitalisation change $150 billion.
2) Yun Jong-Yong – Samsung Electronics (1996 – 2008). Information Technology (South Korea). Market capitalisation change $127 billion.
3) Alexey Miller – Gazprom (2001 – present). Energy (Russia). Market capitalisation change $101 billion.
4) John Chambers – Cisco Systems (1995 – present). Information Technology (USA). Market capitalisation change $152 billion.
5) Mukesh Ambani – Reliance Industries (2002 – present). Energy (India). Market capitalisation change $72 billion.
6) John Martin – Gilead Sciences (1996 – present). Health Care (USA). Market capitalisation change $39 billion.
7) Jeffrey Bezos – Amazon.com (1996 – present). Retail (USA). Market capitalisation change $37 billion.
8) Margaret Whitman – eBay (1998 – 2008). Retail (USA). Market capitalisation change $37 billion.
9) Eric Schmidt – Google (2001 – present). Information Technology (USA). Market capitalisation change $101 billion.
10) Hugh Grant – Monsanto (2003 – present). Materials (USA). Market capitalisation change $35 billion.
The reason you don’t see names such as Bill Gates, Jack Walsh, Larry Ellison, and Warren Buffet, is that they all assumed their CEO roles before 1995, (though the authors feel they would have done well if included).
What’s interesting is that the top 50 increased the wealth of their companies’ shareholders by $48.2 billion (adjusted for inflation, dividends, share repurchases, and share issues); compared to the bottom 50 who produced a loss of $18.3 billion in shareholder value over their tenure, (p.107).
Some other interesting facts from their assessment include;
The median age at which these executives became CEO’s was 52.
Only 1.5% are women.
Only 15% of the CEO’s worked for companies that were situated outside of their country of birth.
16 countries are represented in the top 50.
14 of the top 50 had MBA’s.
12 of the top 50 were recruited from outside the organisation.
Compared to the Barron’s list which is compiled through discussions with investors, analysts and executives, five executives appeared in the Barron’s list and the top 30; Steve Jobs (Apple); John Chambers (Cisco); Jeff Bezos (Amazon); Hugh Grant (Monsanto) and Terry Leahy (Tesco).
The controversy comes from a variety of angles. For example, questions were raised about the validity of Alexey Miller at number three, and the circumstances under which this company generates such large returns. Also questions were asked about non-profit and SME organisations, but then they wouldn’t meet the criteria under which this analysis was conducted. Other questions were around why someone’s ‘favourite’ leader wasn’t on the list.
However, whether ones favourite isn’t in the top 10, or one disagrees with their ranking criteria, what we shouldn’t disagree with is their closing statement, where they conclude that “only by analysing performance over their tenure and beyond can we begin to understand the nature of great leadership,” (p113).
Those who were ranked 11th to 50th were; (11) Robert Tillman (Lowe’s – USA); (12) William Greehey (Valero Energy – USA); (13) Gareth Davis (Imperial Tobacco – UK); (14) William Doyle (PotashCorp – Canada); (15) Benjamin Steinbruch (Companhia Siderurgica Nacional – Brazil); (16) Bart Becht (Reckitt Benckiser Group – UK); (17) Masahiro Sakane (Komatsu – Japan); (18) Terry Leahy (Tesco – UK); (19) John Thompson (Symantec – USA); (20) Graham MacKay (SAB Miller – UK); (21) Mikael Lilius (Fortum – Finland); (22) Mikhail Prokhorov (Norilsk Nickel – Russia); (23) Mark Papa (EOG Resources – USA); (24) C. John Wilder (TXU – USA); (25) Frank Chapman (BG Group – UK); (26) Paul Chisholm (Colt Telecom Group – UK); (27) David Snow, Jr. (Medco Health Solutions – USA); (28) Tomeo Kanbayashi (NTT Data – Japan); (29) Chung Mong-Koo (Hyundai Motor – South Korea); (30) John Lau (Husky Energy – Canada); (31) Stanley Fink (Man Group – UK); (32) Antoine Zacharias (Vinci – France); (33) Juan Villalonga (Telefonica – Spain); (34) Harry Roels (RWE – Germany); (35) Charles Goodyear (BHP Billiton – UK); (36) Matteo Arpe (Capitalia – Italy); (37) Florentino Perez (Group ACS – Spain); (38) Fujio Mitarai (Canon – Japan); (39) Roy Gardner (Centrica – UK); (40) Thierry Desmarest (Total – France); (41) Wang Jianzhou (China Mobile – China); (42) Fu Chengyu (CNOOC Ltd – China); (43) Mark Pigott (Paccar – USA); (44) William Osborn (Northern Trust – USA); (45) Craig Donohue (CME Group – USA); (46) David Simon (Simon Property Group – USA); (47) Larry Glasscock (WellPoint – USA); (48) AJ Scheepbouwer (Royal KPN – Netherlands); (49) Fred Kindle – (ABB – Switzerland); (50) David Pyott (Allergan – USA).
To view the top 100 and access a list of the top 200, go to http://www.hbr.org/top-ceos
References
Hansen, M. T., Ibarra, H. and Peyer, U. (2010). The Best-Performing CEOs in the World. Harvard Business Review, Vol. 88, Issue 1, p.104-113.
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