Best performing CEO’s 2019

The December 2019 edition of the Harvard Business Journal published the annual list of the Top 100 best performing CEOs. CEOs are eligible for the list if:

• they have been in the same position for more than 2 years
• their contract ran up until 31st July 2019
• the company was listed on the S&P Global 1200 list by the end of 2018.

This leaves us with 883 CEO’s at 876 firms from 29 countries.

The list was first published in 2010 and has been an annual event since.

In 2015 a new perspective was introduced rather than taking pure financial indicators into account. Environmental, social and governance indicators (ESG scores) were also taken into consideration when rating the CEO’s success. This ESG rating had a weighting of 20% between 2015-2018, in 2019 its significance was raised to 30%.

Why does this new perspective have to be considered at all?

Because investors and investment funds are now not only considering the financial aspects of their investments but are also taking these other “softer” factors into account.

This should not come as a surprise, as the new generations, which are an ever-increasing part of the human population, are putting a lot more emphasis on these ESG factors. A CEO cannot just deliver good numbers anymore, he/she:

• has to support environmentally friendly behaviour,
• has to take responsibility for the impact on society
• has to ensure the well-being and safety of employees.

The statement of the Business Roundtable held by 181 US CEO’s on 19th. August 2019 supports this idea:

The goal of a company is not only to satisfy the shareholders, but to comply with 4 other stakeholder groups’ interests: the employees, the consumers, the vendors and the community.

Specific traits of the Top 100 best performing CEO’s based on the evaluation of the 883 participants:

• 65 were part of the 2018 list as well,
• they came into the role at the age of 45 and have been in the job for a minimum of 15 years,
• the top 7 CEOs took up their position before 2010,
• there are 4 women in the list of 2019 compared to 3 in 2018,
• all 4 female leaders are in the Top 50,
• the highest ranked women leader is at #16 – Nancy McKinstry – Wolters Kluwer, Netherlands, she has been the CEO since 2003,
• 87 CEOs are insiders, unchanged from last year (out of the 100),
• the Top performing CEO in 2019 was: When Jensen Huang (company: NVIDIA, founded in 1993, field: IT, HQ: United States of America), #2 in 2018 and #3 in 2017.

The methodology of the evaluation and the ranking itself brings a lot of thoughts and new perspectives to Executive Search Consultants.  On the other hand, the rapidly changing world requires new techniques and behaviour from every participant of the business world.

We will share our views about these complex issues in articles to follow.

Source: Harvard Business Journal 2019. November – December