by Morten T. Hansen, Herminia Ibarra, and Urs Peyer
A lot of people have blamed short-term thinking for causing our current economic troubles, which has set off a debate about what time window we should use to assess a CEO’s performance. Today boards of directors, senior managers, and investors intensely want to know how CEOs handle the ups and downs of running businesses over an extended period. Many executive compensation plans define the “long term” as a three-year horizon, but the real test of a CEO’s leadership has to be how the company does over his or her full tenure.
This article contains the first ranking that shows which CEOs of large public companies performed best over their entire time in office—or, for those still in the job, up until September 30, 2009. To compile our results, we collected data on close to 2,000 CEOs worldwide.
It may come as no shock that Steve Jobs of Apple tops the list. However, our ranking does contain a few surprises. You’ll see some relatively unknown faces at the top. The inverse is also true: Some obvious candidates in terms of reputation don’t make the top 50, which we’re printing in this issue—or even the top 100 or top 200. (To view the top 100 and access a list of the top 200, go to hbr.org/top-ceos.) In fact, our list overlaps very little with lists of the most-admired or highest-paid CEOs.
The Top 50 CEOs
Top 100 CEOs Slideshow
When we analyzed the data to see which factors increased the likelihood that an executive would rank high, we uncovered a few more surprises. Although one might expect context to have a big effect, we found a wide diversity of countries and industries represented among the top performers. The CEO’s background did matter, however, as did the situation left behind by his or her predecessor.
Our data highlight the great extent to which CEOs account for variations in company performance, beyond those due to industry, country, and economic swings. That drives home how important it is to use objective, long-term measures to assess CEOs and to inform CEO searches and succession planning.
How the Ranking Was Created
All told, 1,999 CEOs made our first cut, and of those, 731 were still in office on the date we stopped measuring performance. The entire group represented 48 nationalities and came from companies based in 33 countries. The median age at which these executives had become CEO was 52, and those still in office had an average tenure of six years. Only 1.5% were , and only 15% of the CEOs worked for companies based in a country that was not their country of origin. It is still not a global labor market for chief executives.
A lot of people have blamed short-term thinking for causing our current economic troubles, which has set off a debate about what time window we should use to assess a CEO’s performance. Today boards of directors, senior managers, and investors intensely want to know how CEOs handle the ups and downs of running businesses over an extended period. Many executive compensation plans define the “long term” as a three-year horizon, but the real test of a CEO’s leadership has to be how the company does over his or her full tenure.
This article contains the first ranking that shows which CEOs of large public companies performed best over their entire time in office—or, for those still in the job, up until September 30, 2009. To compile our results, we collected data on close to 2,000 CEOs worldwide.
It may come as no shock that Steve Jobs of Apple tops the list. However, our ranking does contain a few surprises. You’ll see some relatively unknown faces at the top. The inverse is also true: Some obvious candidates in terms of reputation don’t make the top 50, which we’re printing in this issue—or even the top 100 or top 200. (To view the top 100 and access a list of the top 200, go to hbr.org/top-ceos.) In fact, our list overlaps very little with lists of the most-admired or highest-paid CEOs.
The Top 50 CEOsTop 100 CEOs Slideshow
When we analyzed the data to see which factors increased the likelihood that an executive would rank high, we uncovered a few more surprises. Although one might expect context to have a big effect, we found a wide diversity of countries and industries represented among the top performers. The CEO’s background did matter, however, as did the situation left behind by his or her predecessor.
Our data highlight the great extent to which CEOs account for variations in company performance, beyond those due to industry, country, and economic swings. That drives home how important it is to use objective, long-term measures to assess CEOs and to inform CEO searches and succession planning.
How Did We Judge Performance?
To create our ranking, we identified the CEOs of all publicly traded companies that had made Standard & Poor’s Global 1200 or BRIC 40 lists since 1997. Considering companies from Brazil, Russia, India, and China in our research was critical, given the growth in emerging economies. To be included, a CEO had to have assumed the job no earlier than January 1995 and no later than December 2007. (See the sidebar “.”) That’s one reason why you won’t find CEOs such as Jack Welch, Warren Buffett, Larry Ellison, and Bill Gates here. They all took the helm before 1995, though they probably would have done well if included. How the Ranking Was CreatedAll told, 1,999 CEOs made our first cut, and of those, 731 were still in office on the date we stopped measuring performance. The entire group represented 48 nationalities and came from companies based in 33 countries. The median age at which these executives had become CEO was 52, and those still in office had an average tenure of six years. Only 1.5% were , and only 15% of the CEOs worked for companies based in a country that was not their country of origin. It is still not a global labor market for chief executives.
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