Inditex Chief Lands #3 Spot on HBR's CEO Ranking

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Inditex Chief Lands #3 Spot on HBR's CEO Ranking

Which 100 CEOs have resisted the lure of short-termism and delivered the best results over time? Harvard Business Review's 2016 ranking of best-performing CEOs provides the answer.

The list, which appears in HBR's November issue, is different from other leader rankings in that it measures performance for the entire length of a chief executive's tenure.

Lars SØrensen, CEO of drug maker Novo Nordisk and last year's #1, once again took the top spot, followed by Martin Sorrell, CEO of advertising firm WPP, and Pablo Isla, head of fast-fashion retailer Inditex (Read a roundtable discussion with these three leaders, moderated by HBR editor-in-chief Adi Ignatius.)

Amazon CEO Jeff Bezos, who last year dropped from the number one spot to #87 after HBR changed its methodology to factor in ESG (environmental, social, and governance) performance, moved to #76. On the purely financial metrics, Bezos still leads all other CEOs.

"In a world of short-termism, we're heartened to see a group of leaders who have stayed the course and delivered strong performance over many years," said HBR editor Amy Bernstein.

To compile the list, HBR looked at CEOs of the S&P Global 1200 as of April 30, 2016, and calculated overall shareholder return and increase in market capitalization over their entire tenure. It also factored in two separate ratings of corporate ESG performance. (Read more about the methodology and how HBR changed the way it computes ESG data this year.)

The list offers a stark reminder that even spectacular past performance doesn't ensure job security. On September 1, Novo Nordisk, whose stock lost nearly 20 percent of its value in August, announced that SØrensen would retire in December, two years ahead of schedule.

2016 ranking statistics:

On average, the world's 100 best CEOs have generated a 2,091 percent overall return on their stock (adjusted for exchange-rate effects), or a 20.2 percent annual return.
The 100 CEOS represent 22 nationalities, and their companies are located in 19 countries. Eight of the top 10 CEOs lead European companies.
24 CEOs on the list have an MBA and 24 have an engineering degree.
On average, they became CEO at age 44 and have been in office 17 years.
Only two women made this year's top 100 – Debra Cafaro of Ventas and Marillyn Hewson of Lockheed Martin – reflecting the persistent underrepresentation of women at the top. Among the 886 companies HBR studied to produce its list, just 28 – or 3 percent – were led by female executives. (See accompanying editor's note: Where Are the Women?)
Previous rankings of the world's best-performing CEOs were published in HBR's January-February 2010, January-February 2013, November 2014, and November 2015 issues.