However, for some leaders 2023 was a vintage year. To determine who did it best, The Economist examined the performance of CEOs of large listed companies in the S&P 1200 index, which covers most major economies bar China and India. We set aside those who have been on the job for less than three years to avoid giving too much credit for replacing an unfit predecessor. We then ranked the remaining CEOs according to the return they generated for shareholders relative to their sector’s average. The top ten by that measure included both good names and relative dark horses.
Among the top ten were heads of two companies – Cameco, a Canadian miner, and PulteGroup, an American homebuilder – whose stellar results were largely thanks to macroeconomic forces (a rise in uranium prices and a drop in sales of existing homes, respectively). We left them. Also on the list were the CEOs of two buyout firms, 3i and Melrose Industries, whose results were more a testament to the performance of the bosses in managing their portfolios than the financiers above. We excluded them as well. Lastly, we also removed Richard Blickman from BE Semiconductor Industries, a Dutch maker of chipmaking tools. His salary was rejected by shareholders—not a good look for any chief executive.
That left us with a shortlist of five superstar managers for 2023 (see table). In ascending order of shareholder return these are: David Ricks of Eli Lilly, now the world’s most valuable pharmaceutical company; David Vélez Osorno of Nubank, a Brazilian new bank that is gobbling up customers across Latin America; Sekiya Kazuma of Disko, a Japanese manufacturer of cutting-edge tools for semiconductor manufacturing; Mark Zuckerberg of social-media giant Meta; and Nvidia’s Jensen Huang, a chipmaker whose market value has soared past $1 a quarter this year.
During the holiday season all five can bask in the warm glow of having generated tremendous shareholder value. But who had the best year of all?
A case can be made for any of the five. Mr. Ricks has put Eli Lilly close to Danish rival Novo Nordisk in the volatile market for anti-obesity drugs and has overseen extraordinary results in a very ordinary year for the industry. Few new banks have succeeded in ousting entrenched incumbents. However, under Mr. Osorno’s leadership, Nubank, which he co-founded in 2013, has grown to become the fifth largest financial institution in Latin America by number of clients. Mr. Kazuma, who also runs Disco’s research and development division, has kept his company at the frontier of semiconductor dicing and milling for many years. After horrifying investors in 2022 with his descent into metaverse madness, Mr. Zuckerberg delighted them in 2023 with his “year of efficiency” and his company’s forays into generative AI. And Mr. Huang cemented his company’s position as the indispensable supplier of the chips feeding the. AI revolution.
So how to choose? One way is to listen to the subordinates. After all, a chief executive who raises the stock price but angers staff is unlikely to be successful for long. We collected figures from Glassdoor, an employee review website, on how workers at the five companies felt about their top executives and their companies more broadly.
At just 62% Mr. Zuckerberg’s approval rating is a clear outlier, suggesting that his “year of performance” was as terrible as it sounds for employees. Worker satisfaction at Disk also seems low (albeit with fewer respondents). One explanation may be the company’s peculiar mechanism for coordinating work. Teams use a virtual currency called Will to pay each other for providing services. Managers then distribute the currency among team members for completing tasks, which determines bonuses. All that sounds like an economist’s dream. but hardly collegiate.
Pissing off customers is also a weak strategy for CEOs. This year a number of US states including California sued Eli Lilly, among others, for allegedly overcharging insulin, an essential drug for diabetics. The company’s decision in March to cut insulin prices by 70% did little to quell the furor. (The company has rejected what it describes as the “false allegations” of the lawsuit in California.)
As for Mr. Osorno, not all of his strategy is bearing fruit. Although Nubank is profitable overall, a feat that has eluded many of its peers elsewhere, it is losing money in Mexico, where its approach to targeting the unbanked is proving costly. If Mr. Osorno does it, he could claim the prize in the coming years.
It is Mr. Huang, then, who rules. Few bosses have been as prescient in their bets on AI as Nvidia’s boss. More than a decade ago, Mr. Huang realized that the graphics processing units produced by his company were also capable of training AI models. In the following years he prepared Nvidia for the AI wave by investing in a proprietary software platform, CUDA, to help developers use its chips and by acquiring Mellanox, a provider of networking technology that connects many chips together to deliver greater processing power. . The reward of those bets is now evident; Nvidia controls more than 80% of the market for specialized AI chips.
Mr Huang, whose signature leather jacket has become as integral to his public persona as the turtlenecks worn by Steve Jobs, is said to share the Apple founder’s intensity and exacting standards. However, he is adored by staff, with a 98% approval rating. All things considered, he had the best 2023 of all.
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From The Economist, published under license. The original content can be found at www.economist.com