For a long time, I’ve felt that one of the big problems with U.S. companies is the near blind focus on quarterly results. Particularly annoying is the practice of rewarding CEOs who have gutted their companies or otherwise done their firms massive damage. The departing Wells Fargo CEO who got $134M + over $500K annual sustaining income after creating the fake account scandal is the most blaring and recent example. If we keep this up I’m afraid we’ll all be unemployed because we are rewarding these folks for the wrong thing.

As a result, I was particularly pleased to see that Harvard Business Review ranked their top 10 CEOs, not by quarterly performance, but by career performance. However, I was saddened to see that only one U.S. CEO made it, NVIDIA’s [Disclosure: NVIDIA is a client of the author] Jen-Hsun Haung made the top 10. I’ve known and watched Jen-Hsun for years and he has been on my short list of CEOs who could perform in line with Steve Jobs who was ranked as last decade’s CEO of the Decade. This recognition is well deserved, but I think we need to look at this ranking as much as the person.

This method of ranking focuses on the performance of a CEO across their entire tenure not just the latest quarter or year. Let’s talk about why this metric is a better metric than one that measures quarterly performance. Read More