It has not been an easy year at the top of the corporate ladder. Slow growth in many markets has forced business leaders to scramble to contain costs while inflation prompted workers to demand steep pay rises. Troubled geopolitics and toxic culture wars have made them feel like tightrope walkers. The craze for generative artificial intelligence has also raised fears of imminent technological disruption.
Still, for some CEOs, 2023 has been a good year. In order to determine who has done better, The Economist has examined the results of the heads of the large companies listed on the S index
The top ten included the CEOs of two companies (Cameco, a Canadian mining company, and PulteGroup, an American homebuilder) whose stellar results have been due primarily to macroeconomic forces (rising uranium prices and falling sales of used homes, respectively). For that reason, they have been discarded. The list also included the CEOs of two buyout companies (3i and Melrose Industries), whose results have shown more of the effectiveness of those running their investment holding companies than of those higher up. They have also been discarded. Finally, we also ruled out Richard Blickman of BE Semiconductor Industries, a Dutch chip-making tool maker. His salary was rejected by shareholders, which is not a good look for any CEO.
The result has been a list of five superstar CEOs for 2023 (see table). In ascending order of shareholder returns they are: David Ricks of Eli Lilly, currently the most valuable pharmaceutical company in the world; David Vélez Osorno, of Nubank, a Brazilian neobank that is winning over clients throughout Latin America; Sekiya Kazuma, of Disco, a Japanese manufacturer of cutting-edge tools for semiconductor production; Mark Zuckerberg of social media giant Meta; and Jensen Huang of Nvidia, a chipmaker whose market value soared above $1 trillion this year.
The five of them will be able to enjoy the Christmas holidays in the glow of having generated enormous value for shareholders. But who has had the best year of all?
There are good reasons to argue in favor of any of the five. Ricks has brought Eli Lilly on the heels of Novo Nordisk, a Danish rival, in the bloated obesity drug market and has managed extraordinary results in a very ordinary year for the sector. Few neobanks have managed to displace traditional operators; However, under Osorno’s direction, Nubank, the entity he co-founded in 2013, has become the fifth financial institution in Latin America in number of clients. Kazuma, who also heads Disco’s research and development division, has managed to keep his company at the forefront of semiconductors for many years. After terrifying investors in 2022 with his descent into metaverse madness, Zuckerberg has pleased them in 2023 with a “year of efficiency” and his company’s forays into the field of generative artificial intelligence. And Huang has cemented his company’s position as an indispensable supplier of the chips powering the artificial intelligence revolution.
So how to choose? One way to do this is to listen to subordinates. After all, a CEO who drives up the stock price but infuriates staff doesn’t seem likely to succeed for long. We collected data from Glassdoor, an employee review website, about how workers at those five companies feel about their CEO and their company as a whole.
At just 62%, Zuckerberg’s approval rating is a clear outlier, pointing to his “year of efficiency” being as horrible as it sounds for employees. Disco worker satisfaction also seems low (although with fewer responses). One explanation may be the company’s strange mechanism for coordinating work. The teams use a virtual currency called “will” to pay each other for the provision of services. Managers then distribute the currency among team members for completing tasks, which determines bonuses. The system looks like an economist’s dream, but it is not at all friendly.
Provoking customers’ anger is also not a wise strategy. This year, several US states (including California) have sued Eli Lilly and other managers for alleged overbilling of insulin, an essential medication for diabetics. The decision taken in March by the company to reduce insulin prices by 70% has not done much to quell the unrest (the company has rejected what it calls “false accusations” of the Californian lawsuit).
As for Osorno, not all of his strategy works. While Nubank is profitable as a whole, an achievement that has eluded many of its competitors elsewhere, it loses money in Mexico, where its approach to targeting the unbanked is proving costly. If Osorno has his way, he can claim the top spot for years to come.
So the one who prevails is Huang. Few bosses have been as farsighted in their bets on artificial intelligence as the head of Nvidia. More than a decade ago, Huang realized that the graphics processing units his company produced were also used to train artificial intelligence models. In the years that followed, he prepared the company for the wave of artificial intelligence by investing in a proprietary software platform (CUDA), which helps developers use its chips, and by acquiring Mellanox, a provider of networking technology that connects many chips. each other to deliver greater processing power. The profitability of these bets is evident today: Nvidia controls more than 80% of the market for chips specialized in artificial intelligence.
Huang, whose signature leather jacket has become as much a part of his public image as Steve Jobs’ turtlenecks, reportedly shares the Apple founder’s intensity and high standards. Despite this, he is adored by the staff, with a 98% approval rating. So, considering all those elements, he is the one who has had the best 2023.
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Translation: Juan Gabriel López Guix
