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2015-01-15 07:28:40
Sydney Finkelstein
In December, I wrote about the worst CEOs of the year and all the reasons 2014
was a year those hapless leaders would like to forget.
But you might be asking, who were the best CEOs? This story is quite different
a profile of five fabulous leaders who turned in stellar years that generated
huge value for shareholders, highly desirable new products and services for
customers, and, usually, energised employees as well.
My research team analyses hundreds of companies to identify the very few that
not only reported exceptionally good financial results, but were also led by a
CEO whose actions, or inactions, directly affected those results. To make sure
we have it right, we compare our best CEO picks to other leaders in the same
industry to gauge relative performance. And while my list looks at 2014, it s
inevitable that some of the decisions and actions of CEOs that earned them
their spot can be attributed to previous years, as well.
Now, without further delay, scroll through the images above to see the best
CEOs of 2014.
Number 5: Andrew Wilson, Electronic Arts
Andrew Wilson might be the least well-known of the top five CEOs of the year,
but consider this: Video game maker Electronic Arts was named Worst Company in
America by Consumerist (a unit of Consumer Reports) in 2012 and in 2013. After
Wilson took over as a turnaround CEO in September 2013, EA clocked big revenue
increases and doubled its stock price in 2014.
It s unusual to see such an abrupt change that coincides with the appointment
of a new CEO. What did Wilson do? First and foremost, Wilson spearheaded a
corporate culture change centred on being Player-First . This translates into
a strategy that is more in line with customer expectations by offering more
free-to-play games with in-app purchase opportunities.
He s also pushed EA to embrace a digital strategy that has led to a 89%
increase in FIFA Online 3 revenue (available in Asia only) and the launch of EA
Access, a new digital service for Xbox One players that allows unlimited play
across a selection of EA titles for a monthly or annual fee.
Wilson has also improved EA s Madden NFL and FIFA football franchises. The
number of Madden games played is up 48% year on year, and the FIFA 15 launch
surpassed 3.4 million unique players in one day (a record launch for FIFA
games). Having run EA Sports before being named CEO, it s not too surprising
that Wilson had a few tricks up his sleeve for Madden and FIFA in 2014. A
strong year from the fifth best CEO.
Number 4: John Martin, Gilead Sciences
Gilead Sciences is a pharmaceuticals company that went to market with one of
the most controversial drugs of 2014, Solvadi. Something close to a miracle
drug for those suffering from Hepatitis C, Solvadi is the first treatment that
stops Hep C in its tracks.
So what s the problem? The drug will cost patients or more accurately
insurance companies $84,000 for a full treatment cycle.
It s not hard to see how an $84,000 drug will get all sorts of people, and
governments, upset about price gouging. John Martin, the CEO of Gilead, faced
this threat in 2014 and won. Yes, there are big discounts for some types of
users, and for patients in many non-Western countries, but the net-net is that
Solvadi earned the company $8.5bn in sales during its first nine months. Gilead
s stock was up 25% in 2014, a reflection of the more than doubling of total
revenues for the entire company and a considerably better result than most of
its competitors.
Martin deserves lots of credit for this success. But he also has directed other
wins for Gilead in 2014, including FDA approval of Zydelig, a treatment for
three forms of lymphoma-related cancers, and a new deal with Mylan to produce
Gilead s upcoming HIV treatment drug, TAF. In a tough business environment,
Martin managed to lead Gilead via value-based pricing strategies, successful
drug launches and a promising drug pipeline.
This year may be more of a challenge as alternative Hep C drugs hit the market,
sometimes at lower prices to Sovaldi and in one instance, with an exclusive
deal with a big prescription drug benefit provider. So, while 2014 was a
particularly strong year for Martin, making him number four on the best CEO
list, 2015 is shaping up to be another test of his leadership.
Number 3: Jack Ma, Chairman, Alibaba
The third best CEO (technically, chairman) of 2014 might be number 1 on many
lists. Jack Ma guided Chinese internet innovator Alibaba to the largest IPO the
world has ever seen, raising $25bn in the process. As founder and CEO for
years, and now chairman, Ma has succeeded in building arguably the first
made-in-China digital powerhouse company to make it big in Western markets
(Tencent and Xiaomi aren t far behind).
Alibaba is the world s biggest e-commerce company, generating 2014 sales double
that of Amazon and eBay combined. It s also on the way to becoming one of the
biggest banks in China through its Alipay app, which allows customers to make
online purchases, including of its own money-market fund ($90bn in assets after
18 months in business). Ma s strategy is to compete in many of the sectors of
the online world, and in addition to everything else, he is also doing so via
2014 investments in Ping An Insurance, China s second-largest insurer, and
stakes in prominent Silicon Valley start-ups, including Lyft, Tango, Fanatics
and Kabam. In addition, Ma is expanding Alibaba s presence in a number of
tangential industries that have high growth potential in a number of emerging
markets.
The big challenge for Ma in 2015 will be to maintain momentum while balancing
all the initiatives on the table for Alibaba. The company s growth trajectory
is aggressive even for online companies, but Ma is the type of leader who is
highly unlikely to become complacent amid all the superlatives. Add in the
pressure that fellow online giant Tencent, in particular, will bring, and the
inability to surprise anyone anymore in Western countries, and 2015 will test
the mettle of Ma s leadership.
If he pulls it off again, it won t be surprising to see him make the best CEO
list once more.
Number 2: Kevin Plank, Under Armour
How could you not like Kevin Plank? Imagine a CEO of a sports apparel and
footwear company having the nerve to take on the absolute king of the business,
Nike.
That s what s going on at Under Armour, which just surpassed Adidas to take the
number two spot in sports apparel and footwear companies in the US.
Plank is the strategic and inspirational leader of a company that hit it out of
the park in 2014. After the stock price rose 80% in 2013, it was up another 56%
in 2014 (Nike was up 23% in 2014). Under Armour has had four straight quarters
of more than 30% growth and 18 straight quarters of more than 20% growth. These
gains have been driven by Under Armour s success in footwear and international
markets. Footwear revenues were up 50% in the third quarter of 2014 and its
international business rose 94%.
Looking ahead for 2015, Plank is leading a strong push to increase the company
s appeal with women. Part of this effort has included signing model Gisele
Bundchen as a spokesperson and launching new commercials that target women.
After years of spotlighting mostly male American football, basketball and
baseball players, Under Armour released a ballerina commercial that garnered
more than seven million views on YouTube.
Of course, Nike is still the giant, but for finally bringing on a worthy
competitor, Kevin Plank deserves his ranking as the number two best CEO of
2014.
Number 1: Elon Musk, Tesla and SpaceX
It s hard to imagine a much better 2014 than Elon Musk enjoyed. Not only did
his electric-car company Tesla chalk up another great year, with stock price up
48% after an increase of 344% in 2013, but his SpaceX company also made a
number of successful trips to space and won important government contracts.
That s right, Musk was CEO of two different companies, and both turned in
stellar years.
How did it happen? For Tesla, slowly but surely sceptics are losing their edge.
Revenue increased 60% during the first nine months of 2014 and the company
announced the launch of the Model X (seven-seat SUV). Add in Musk s big deal
for a giant battery factory a key component in the Tesla ecosystem and you
start to see his grand plan truly moving off the drawing board and into
reality.
Somehow, at the same time, SpaceX announced that it managed to cut down the
price of satellite launches to $100m, and picked up a $2.6bn contract from NASA
to carry US astronauts to and from orbit. Want more? SpaceX demonstrated its
operational excellence by successfully completing four missions into space to
launch new satellites and refuel the International Space Station in the first
seven months of 2014. And just recently SpaceX almost successfully landed a
13-story booster rocket that had taken a cargo capsule into orbit and made it
back to an ocean barge before bumping around and damaging some equipment.
The man doesn t lack for ambition.
Elon Musk is fast becoming the Henry Ford, or is it the Howard Hughes, of his
generation. And he s also the number one CEO of 2014.