There’s no doubt about it: It’s a jungle out there on Wall Street, and a lot of chief executives are under fire these days. It was easy to justify that big bonus and corner office when times were good and everyone was rolling in profits — but now that the economy is very challenging and even good stocks have trouble getting ahead, the bar is significantly higher for company leadership.
The worst CEOs tend to make themselves pretty obvious as their company struggles and shares plummet. That’s not a knock on anyone’s character — Carol Bartz might be a great host for bridge, but you’d be hard-pressed to find someone who thinks the former Yahoo (NASDAQ:YHOO) CEO was unfairly fired after her big plans to revitalize the struggling media giant failed rather painfully.
In business, results matter. And if you don’t get results in this market, you probably don’t deserve to be CEO.
The best CEOs are harder to pin down because good ideas can take time to develop and often can’t be attributed to just one guy behind a desk at a mammoth corporations. Besides, some of the best-run companies on Wall Street make succession plans a long-term process — look at IBM (NYSE:IBM) with its very deliberate passing of the torch to company insider Virginia Rometty, or Apple (NASDAQ:AAPL) planning for years to accommodate Steve Jobs’ departure and Tim Cook’s elevation to CEO.
That said, it’s hard to believe the person in charge at the company is just sleeping under her desk while the stock price goes up and sales continue to improve.
So who are the best and worst CEOs in the Dow across 2011? Let’s take a look using the simple proxy of share price, earnings per share and revenue gains as an indication of their performance this year:
Best Dow CEO: James Skinner, McDonald’s
The easy winner for best Dow CEO in 2011 is McDonald’s (NYSE:MCD) leader James Skinner. Skinner has presided over a 31% rise in share price for MCD stock this year, the best in the entire Dow Jones Industrial average. McDonald’s also has enjoyed what is projected to be a 12% jump in fiscal 2011 earnings over last year and an EPS gain of 14% over 2010 numbers. This comes as just the latest in a long line of gains for McDonald’s — the stock is up more than 300% since Skinner took over in 2004, compared with just 15% gains for the broader market.
Honorable Mention: Francis Blake, Home Depot
Although the long-term performance hasn’t been as dramatic, Home Depot (NYSE:HD) CEO Francis Blake deserves credit for a 20% gain in share price this year and continued growth in revenue and profits (at least compared with 2010 numbers). HD obviously has systemic challenges created by a battered housing market, but Blake has kept Home Depot in good standing with investors. Home Depot also has managed to boost its dividend 22% since 2010, showing that it’s happy to share its wealth with shareholders.