For a lot of people, the only true gauge of a company’s CEO’s worth is its return to shareholders. Whichever company’s stock provides the biggest returns, that’s the one with the best CEO.
None of those people are Santa Claus, though.
Beyond what America’s corporate executives might be expecting in their stockings on Christmas morning, the simple reality is that the optics of your CEO’s decisions matter in this day and age. The perception that a company’s leader lacks moral fiber or compassion can ultimately mean very real consequences for its bottom line — especially with the way that social media can shape consumer trends.
So, with that in mind, here’s a closer look at which companies have leaders that are likely to get ponies, and which CEOs should expect lumps of coal.
Jeff Bezos: Naughty
It’s been a busy year for Jeff Bezos, who spent 2018 overtaking Bill Gates as the world’s wealthiest individual — among other things. However, while $124 billion can buy a lot of ponies — with or without any magical elves — concerns about working conditions at Amazon warehouses have landed Bezos on the naughty list this year.
A book from a British journalist who worked undercover in an Amazon warehouse revealed that the company would dock workers for taking sick days and had to wear devices that tracked their movements and notified them if they slowed down. The company moved to quell criticism — including Bernie Sanders’ “Stop BEZOS” Bill — by boosting wages with a new minimum rate of $15 an hour, but even that met with criticism when it became clear that the change also included removing monthly bonuses and stock grants that were ultimately worth more than the raises in many cases.
Elon Musk: Naughty
Definitely, definitely naughty. As ironic as it is to think of one of the world’s leading clean energy advocates receiving fossil fuels for Christmas, this is one CEO who should expect a whole stocking-full of coal. But hey, at least he’ll have a flamethrower to ignite it with.
To recap, in 2018 Elon Musk:
- He accused a British diver who aided in the efforts to rescue the soccer team stranded in a cave in Thailand of being a pedophile — more than once.
- He very publicly smoked marijuana while appearing on Joe Rogan’s podcast, which is legal in California, but it’s still not a good look for a CEO.
- Musk admonished journalists for the crime of asking about the company’s finances, during an earnings call, of all things.
- He had to settle with the SEC to pay a hefty fine and leave his position as Chairman of the Board at Tesla after he tweeted — inaccurately — that he had secured the funding to take Tesla private at a significant premium to the current share price.
That last one is especially egregious and would be more than enough to land him on the naughty list without the rest. Musk is an overachiever in more ways than one.
Mark Zuckerberg: Naughty
If there’s a bigger lump of coal than shaving over $100 billion off of your company market cap in a single trading day — not to mention $15 billion off of your net worth — it’s hard to imagine. However, Mark Zuckerberg and company have spent much of the year fighting a growing perception that their product is bad for people.
Most recently, that included revelations that Facebook hired a Republican opposition-research firm to smear activists by linking them to George Soros, research senators who would be questioning company executives and publish articles critical of the company’s rivals.
Tim Cook: Nice
Tim Cook has certainly been nice to the company’s shareholders. As the CEO of the world’s first $1 trillion public company, he deserves some serious credit. But he’s also been a strong advocate for positive changes in how people interact with technology and corporations. He called for stronger regulation of privacy and data use by tech companies in March, and the iOS 12 update included a number of functions to help users manage their screen time.
Larry Page: Naughty
Okay, so technically Larry Page’s crimes as a corporate leader didn’t actually happen in 2018. They happened in 2014, and he’s just now catching the (warranted) flak about Google’s behavior. Nonetheless, he’s on the naughty list even if it’s retroactive in nature. That’s because the revelation that Android-creator Andy Rubin received a generous exit package after sexual harassment accusations and that the company covered up the reasons for his ouster prompted a walkout by employees and an overhaul of the company’s policies.
Warren Buffett: Nice
Who wouldn’t love Warren Buffett? Between his pearls of wisdom about investing, his wonderful letters to the shareholders and his pledge to give 99 percent of his massive fortune to charity, Buffett has become a symbol for Americans who want to believe that getting ahead doesn’t mean doing wrong.
And on top of all that, Buffett had another big year as the leader of Berkshire Hathaway. The company’s stock offered shareholders returns of 9.6 percent in 2018 as of mid-November, more than quadrupling the 2.1 percent return of the S&P 500 over the same period. See what stocks Buffett bought and sold in 2018.
Santa should give this man all the presents he wants. After all, he’ll probably end up giving 99 percent of them away.
Mary Barra: Naughty
General Motors CEO Mary Barra almost made the nice list. For starters, the perception that General Motors is a dinosaur lurching towards irrelevance has been dealt a serious blow of late, and Barra deserves a lot of the credit. Under her leadership, the company has invested heavily in electric and low-emissions vehicles while also diving into the race for autonomous vehicles and forming partnerships with ride-sharing firms.
But when the company announced in late November that it would be closing five plants and cutting thousands of jobs — potentially up to 14,000 — Barra’s name quickly went from Santa’s nice list to the naughty one just in time for Christmas.
Virginia Rometty: Naughty
While long-time IBM CEO Virginia Rometty might have stayed out of the news for any major scandals this year, it’s her company’s performance that ultimately lands her on the naughty list. As of Nov. 15, Big Blue has been giving shareholders the big blues in 2018 with shares off 17.3 percent on the year. And before you start blaming it all on simple market volatility, note that the company reported its third straight year of declining revenues for 2017, with 2017’s figure some $13.7 billion lower than 2014’s.
IBM has reinvented itself before — can the company do it again?
Jack Dorsey: Nice
Jack Dorsey has been on the naughty list in past years, thanks to scandals over ongoing hate speech on his company’s platform and the abuse by Russian bots, but he appears to deserve some credit for Twitter’s performance in 2018. In addition to banning noted conspiracy theorist Alex Jones for abusive behavior, Dorsey appears to have finally solved the puzzle and figured out how to effectively monetize users.
Twitter has reported a profit with every quarterly report in 2018 and has boosted revenue from Q1 to Q2 and Q2 to Q3. And, barring a pretty catastrophic reversal in the final three months of the year, the company should also report the first profitable year in its history for 2018. This would be quite an impressive feat, given that it only managed its first profitable quarter in Q4 2017.
Reed Hastings: Nice
If nothing else, Reed Hastings lands on the nice list for giving everyone a bevy of content to keep their evenings and weekends entertaining. As the platform continues gearing up for a streaming battle with Disney that could define the future of the business, 2018 has seen Netflix deliver a new season of “Narcos,” “Orange is the New Black,” “House of Cards,” “Making a Murderer” and “Daredevil,” among a whole lot more.
The company has done all that while adding about $100 to its share price as of mid-November. If Santa misses the Hastings household this year, it’s probably just because he’s binging “Black Mirror.”
Indra Nooyi: Nice
Longtime Pepsi CEO Indra Nooyi announced that 2018 would be her final year with the company as chief executive, though she will remain as Chairwoman of the Board until early next year. During 12 years at the helm — half of the 24 total years she’s spent with the company — she grew the company’s sales by 80 percent and greatly expanded its product portfolio through acquisitions like Quaker Oats. As of 2017, Pepsi could boast nearly double the sales of rival Coca-cola. As such, it seems apt that she be sent on her way with an appearance on the “nice” list.
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About the Author
Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.