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The test of a chief executive comes in tough times. Not that it's easy managing a large corporation in good times. But when the economy and financial markets sour, you need more than moxie to prevail. CEOs need to confront a challenging business environment while juggling the demands of customers, employees and investors.
Crisis management wasn't the main criterion we used to assemble our fourth annual list of the 30 best corporate leaders worldwide. Yet great CEOs shine in hard times, and our bet is that these 30 are up to the task.
It's a comfort to investors that Fred Smith is at the helm of FedEx (FDX, news, msgs) as a faltering economy dampens shipping volume, and that Ken Chenault is leading American Express (AXP, news, msgs) as many consumers hit rough financial straits. Peter Rose, maverick CEO of the global-logistics outfit Expeditors International (EXPD, news, msgs), has banned the word "recession" from internal company correspondence. To him and other hard-nosed CEOs, a downturn brings the opportunity to expand market share at the expense of weakened rivals. That's what Warren Buffett of Berkshire Hathaway (BRK.A, news, msgs) is doing by forming a municipal-bond insurer that already is taking business from ailing incumbents such as MBIA (MBI, news, msgs).
Our list includes chief executives -- many familiar and some less so -- who've built reputations as excellent managers and have delivered for shareholders. This ranking isn't based on any statistical formula. Rather, we've talked to investors and analysts; analyzed financial and stock-market performance; and assessed intangible qualities such as leadership and industry stature. We've drawn on the knowledge of Barron's staffers, too, many of whom have contributed to this story.
To merit inclusion, CEOs need to have been on the job at least three years, and we generally prefer those with at least five years' experience, because it takes time to make a mark on an organization and develop a reputation in the financial community.
Some CEOs with lesser tenures are clearly distinguishing themselves -- witness Jamie Dimon at JPMorgan Chase (JPM, news, msgs) -- but we're sticklers for longevity.
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A prime example is Buffett, who took control of Berkshire in 1965 when it was a struggling textile company. We suspect that except when Buffett is sleeping or playing bridge, his mind doesn't stray much from Berkshire and business. He's someone who can walk into a restaurant and quickly estimate its profitability. Today's Berkshire is Buffett's baby; so is Dish Network (DISH, news, msgs) for founder Charlie Ergen and Costco Wholesale (COST, news, msgs) for co-founder Jim Sinegal.
What else besides commitment would motivate Sinegal, at 72, to try to visit all 391 domestic Costco stores two times a year and cut the ribbon at every store opening? Sinegal stays in budget hotels, takes a modest base salary of $350,000 annually and insists on a one-year contract because he wants to give the Costco board the freedom to replace him if his performance flags. Sinegal shows the importance of setting an example at the top.
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Executive suite swellsTitle inflation is on the rise as companies seek to reward and retain their best people. One hotel chain created the job of chief beer officer, and 5,000 people applied. Chief diversity officer and chief green officer are also popular titles.
Until the BlackBerry came along, how many people felt they needed to have mobile e-mail access? Early adopters were hyperactive Wall Street types, but Research In Motion has turned the BlackBerry into a popular corporate and consumer product. Even stay-at-home moms in Greenwich, Conn., or Grosse Point, Mich., can be seen checking e-mail on their BlackBerrys as they sit through yet another PTA meeting.
The BlackBerry's success -- there are about 14 million in use -- may exact a social cost in the form of strained marriages, with spouses complaining about an ever-present "third person in the room." Investors, however, are plenty pleased. As recently as 2002, the stock sold for about $1 and was valued at little more than the cash on the company's balance sheet. It's now above $100, and the company has a market capitalization of nearly $60 billion, having burned a legion of short sellers along the way.
Continued: The ultimate high-wire act
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