BOSTON--(BUSINESS WIRE)--Lars Rebien Sørensen may not be a household name, but today he tops Harvard Business Review’s list of the best-performing CEOs in the world.
The chief executive of Danish pharmaceutical giant Novo Nordisk, which commands nearly half of the market for insulin products and has branched into treatments for obesity, hemophilia, and growth disorders, heads Harvard Business Review’s 2015 ranking of the 100 best-performing CEOs. The list, which appears in HBR’s November issue, measures CEOs performance over the long term – for the entire length of their tenure.
“Our goal is to create a list that gets beyond the most recent quarterly or even annual results and truly evaluates long-term financial performance,” said Adi Ignatius, editor in chief of Harvard Business Review. “We measure market performance, but we have changed our methodology this year to also factor in social responsibility.”
To create the list, HBR looked at CEOs of the S&P Global 1200 as of April 30, 2015. For each executive, HBR looked at three company metrics: industry-adjusted shareholder returns, country-adjusted shareholder returns, and increase in market capitalization over the CEO’s tenure.
This year HBR also used environmental, social, and governance (ESG) performance data from investment research firm Sustainalytics. The overall ranking weighted CEOs’ financial results at 80% and ESG performance at 20%. Additionally, HBR changed its methodology from previous years to include CEOs who took the reins before 1995.
Among the findings:
- As a result of HBR’s revamped methodology, Novo Nordisk’s Sørensen came out on top and Amazon’s Jeff Bezos, who was last year’s #1 CEO, moved down to #87. On the purely financial metrics, Bezos leads all other CEOs – but Amazon’s relatively poor ESG score brought him down the ranking. Sørensen finished sixth in overall financial performance; that, combined with a high ESG ranking, earned him this year’s #1 slot. (Read more on Sørensen’s approach to leadership.)
- At #101, Warren Buffett just barely missed the cutoff. (See “Where’s Warren Buffett?” in the article.)
- Ex-Volkswagen CEO Martin Winterkorn, who resigned amid the emissions scandal as HBR’s list was going to press, is ranked #20. This score was based on VW’s financial data through April 30, 2015, as well as a relatively strong ESG score that has since been downgraded by Sustainalytics.
- Ventas CEO Debra Cafaro (#47) and TJX CEO Carol Meyrowitz (#81), who announced last week that she’s stepping down from her post in January, are the only women to rank in the top 100.
Previous rankings of the world’s best-performing CEOs were published in HBR’s January-February 2010, January-February 2013, and November 2014 issues.
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