Many factors influence a company’s performance — some within the control of corporate leadership and some outside out of it. Anything from government regulations, economic conditions, the price of oil, and unpredictable events can change a company’s bottom line.
It is largely the responsibility of CEOs to manage the risks of doing business. In addition, top management is expected to have impeccable knowledge of the industry and its customers. Taken together, CEOs make strategic decisions to steer the company in the right direction. For these reasons, investors watch CEOs very closely.
24/7 Wall St. reviewed various data for S&P 500 companies, including historical share prices, CEO tenures, and other performance metrics to identify some of the best CEOs in the nation. Jen-Hsun Huang of Nvidia is the leader as shares of the company he heads shot up 550% over the last three years. Martin Anstice of Lam Research Group rounds out the list in 15th place as LRCX shares nearly doubled in value in a three year period.
The exact manner in which a CEO’s performance affects a company is difficult to pin down. In addition to providing a vision and long-term path for a company, a CEO participates in high-stakes negotiations for such deals as mergers, which can dramatically alter — for better or worse — the course of a company.
Despite opposition from the federal government, managed care company Humana and pharmaceutical giant Aetna are widely expected to complete a shareholder-approved merger due to the cooperation of corporate leadership. Facebook CEO Mark Zuckerberg’s decision to acquire Instagram for $1 billion in 2012 — considered ludicrous at the time, but a steal today — is another example. Similarly, the profits garnered from the massive consolidation in the airline industry would not be possible without the vision, cooperation, and negotiations performed by each company’s top executives.
To determine the best CEOs in America, 24/7 Wall St. reviewed the three-year stock price change through December 29, 2016 for all S&P 500 companies. To be considered, a company’s stock price needed to have significantly outperformed the S&P 500 index over the past three years as well as over the past 12 months, and — to ensure company performance can reasonably be attributed to current leadership — a CEO’s tenure needed to be at least three years. There are 15 companies on the S&P 500 that meet these criteria. Financial data for each company was obtained from the most recent financial documents filed with the federal government.
These are America’s best CEOs.