 "Is Amazon's Bezos really the world's best CEO? HBR says 'Yes'")
Within days of Amazon posting the worst quarterly numbers in 11 years, the American e-commerce company’s founder and chief executive Jeff Bezos has emerged top of the list for best-performing CEOs in the world, making people sit up. The November issue of Harvard Business Review has ranked Bezos as the number one living CEO.
However, had Steve Jobs, co-founder of Apple, been alive, he would have been the best performing CEO, author of the HBR report Adi Ignatius has said replying to online comments from readers.
However, had Steve Jobs, co-founder of Apple, been alive, he would have been the best performing CEO, author of the HBR report Adi Ignatius has said replying to online comments from readers.
The report, which lists only one CEO of Indian origin (Ajay Banga of Mastercard) among the 100 names representing various industries, is trending online because of Amazon’s record third quarter losses. One question that is being asked is, how Bezos has been assessed the best performing CEO if his company is reporting huge losses!
For the third quarter, Amazon posted a net loss of $437 million against $41 million loss a year ago. Analysts had projected a loss of $331.4 million for Q3. The sales, however, rose 20 per cent to $20.6 billion in the third quarter.
For the third quarter, Amazon posted a net loss of $437 million against $41 million loss a year ago. Analysts had projected a loss of $331.4 million for Q3. The sales, however, rose 20 per cent to $20.6 billion in the third quarter.
The publication has said that the ranking has been based on hard data. "Specifically, we looked at the increase in total shareholder return and market capitalization.’’ Also helping him get the top rank is his focus on long-term. In fact, "it is still day one for us," is a mantra at Amazon popularised by Bezos, who still is fond of that line even 20 years after starting the company.
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Kiran Karnik, who was earlier the chairman of information technology (IT) association Nasscom and had recently interviewed Bezos at a business forum, said, "What sets Bezos apart from many others is that he believes in investing for the future and looking at the business long-term." He’s not a QSQT (quarter se quarter tak--a term used to describe a company’s short-term goal) man, he added.
According to Karnik, in a rapidly changing world, businesses must look beyond their immediate areas of interest. Bezos founded Blue Origin, a company looking at space travel, and then acquired a leading newspaper--Washington Post.
According to Karnik, in a rapidly changing world, businesses must look beyond their immediate areas of interest. Bezos founded Blue Origin, a company looking at space travel, and then acquired a leading newspaper--Washington Post.
By all accounts Amazon’s mature businesses (such as online retail) are profitable; it’s his deep investments in new businesses that create accounting losses, which he regards as a false measure of performance, the HBR report says.
Agrees Arvind Singhal, a leading commentator on the retail sector and founder-CEO at Technopak Advisors. ‘’I cannot say whether Bezos should or should not be the number one CEO in the list of best-performing CEOs. But, Bezos cannot be written off because he has chosen to make losses in some businesses that he has invested in.’’ His core business of e-commerce is doing well, he said.
During his recent visit to India, Bezos told Business Standard in an interview that obsessing about customers, rather than competition, was the best thing that a company can do. He dismissed competition as ‘’a bunch of noise’’. Earlier this year, Amazon announced an investment of $2 billion for India, just a day after Flipkart signed a deal to raise $1 billion from a clutch of investors.
Besides Bezos, the top 10 in the list of best-performing CEOs are John Martin of Gilead Sciences, John Chambers of Cisco, David Pyott of Allergan, David Simon of Simon Property, Lars Rebien Sorensen of novo Nordisk, Hugh Grant of Monsanto, J Michael Pearson of Valeant Pharmaceuticals, Mark Donegan of Precision CastParts and William Doyle of Potash Corp.
The report shows that at least one-fourth of the top 100 CEOs have MBAs and as many have engineering degrees. As for compensation, Bezos is second-to-last in the list, earning a 2013 salary of $81,000 and total compensation of $1.7 million. But the report points out that Bezos holds 18 per cent stake in the company, "which means that for every $1 increase in Amazon’s share price, Bezos’s net worth rises by $84 million".
The report shows that at least one-fourth of the top 100 CEOs have MBAs and as many have engineering degrees. As for compensation, Bezos is second-to-last in the list, earning a 2013 salary of $81,000 and total compensation of $1.7 million. But the report points out that Bezos holds 18 per cent stake in the company, "which means that for every $1 increase in Amazon’s share price, Bezos’s net worth rises by $84 million".