Most of the time, the world’s best chief executive officers (CEOs) aren’t the ones who stand out the most. They think about things other than tomorrow’s stock prices or the next earnings call in order to make value that will last. Here are seven of the best CEOs that long-term buyers should watch as they build great companies whose shares are worth keeping for decades.
- Lisa Su, MD, AMD
When Dr. Lisa Su took over as CEO of Advanced Micro Devices (AMD 3.53%) at the end of 2014, the chip company looked like it would fail. By the middle of February 2022, the price of an AMD share was almost 35 times what it was when she took charge.
Su, who has a Ph.D. in electrical engineering from the Massachusetts Institute of Technology, led the amazing comeback by focusing on what the company did best: making central processing units (CPUs) for computers and servers. She also changed the business to focus on chips for game systems and data centers, which were good bets during the COVID-19 pandemic. But Su’s choices about what not to work on were just as important. For example, he didn’t make chips for smartphones and tablets, even though the rest of the chip business still thought mobile was the next big thing.
The company recently made its first purchase under Su’s direction. It spent $50 billion to buy Xilinx (NASDAQ: XLNX), another semiconductor company. AMD says the acquisition will allow it to reach a total market of $110 billion.
- Airbnb’s Brian Chesky
CEO Brian Chesky of Airbnb (ABNB 0.87%) got in trouble in 2020 when the company fired 25% of its workers because of the pandemic. The move hurt employees, but Chesky has been praised for handling the cuts. Each employee who was let go got at least 14 weeks of retirement pay and more health insurance and help for their mental health. The company also did a lot to help people find jobs. For example, it started a talent list to help people who lost their jobs find work, even if it was with a rival.
Chesky has used the pandemic to make Airbnb more focused since then. Since flexible work makes it easier for people to live anywhere or travel for long periods, the company is putting more emphasis on long-term trips. Chesky has called this change “the biggest change to travel since commercial flying.” By the last three months of 2021, half of all Airbnb stays would be for a week or more.
At the start of 2022, Chesky said he would become a digital traveler. For now, he lives in Airbnbs. He moves to a new city every few weeks and returns to Airbnb’s San Francisco offices when he needs to. Airbnb says this will improve the design of its services for users.
- Lowe’s Marvin Ellison
Marvin Ellison skipped the welcome parties on his first day as CEO of Lowe’s (LOW 0.88%) in 2018. Instead, he went to the contractor’s desk in a store to learn more about what people were having trouble with. In February 2020, Ellison talked to CNBC about another thing bothering customers. He said that the company’s website was so “clunky” that you might be unable to finish the checkout process. Ellison’s efforts to improve e-commerce came just in time for the pandemic. During the company’s 2020 fiscal year, online sales increased by 111%.
People generally spent more time at home, which was good for home repair stores. Since the sales boom caused by people who worked from home has died down, Ellison has turned his attention to growing the company’s business with professional workers.
- General Motors CEO Mary Barra
General Motors (GM 0.09%) is different from the company that everyone is talking about when it comes to electric cars. But if you think that cars won’t need petrol in the future, you should pay close attention to what GM CEO Mary Barra has planned for the company. Barra is moving forward with a big plan to put $27 billion into electric cars by 2025. In January 2021, Barra said that GM’s goal was to make all light-duty vehicles electric by 2035. The company wants to spend almost $7 billion to build a new battery plant and update its current plant in Orion, Michigan, to make electric cars.
Barra is an electrical engineer who started at GM as an intern when she was 18 years old in 1980. She doesn’t have a history of wasting money on bad trends. When Barra became GM’s CEO in 2014, she started streamlining the company by eliminating low-performing cars and leaving expensive markets like Europe and India.
Barra has also simplified the way he runs his business. She famously summed up GM’s 10-page dress code in two words: “Dress appropriately.” In April 2021, she did something similar when she revealed GM’s new “Work Appropriately” policy, which lets workers work from home permanently if their jobs allow it.
- Microsoft CEO Satya Nadella
In the first five years that Satya Nadella was CEO of Microsoft, the company’s market cap exceeded $1 trillion. One of the main reasons for Nadella’s success was his decision to make Microsoft’s cloud services, starting at the time, the new core of the company’s business, and drop plans for a Windows phone. Under Nadella’s direction, the company has done a lot for investors. For example, a Microsoft share’s price has increased by more than five times.
Nadella has also changed Microsoft’s typically harsh attitude, which meant that workers often competed with each other instead of working together. When he became CEO for the first time in 2014, he told his workers to be “learn-it-alls” instead of “know-it-alls.” But even though Nadella has gotten a lot of praise for changing how Microsoft works, he is careful not to take too much credit for it.
“From ancient Greece to modern Silicon Valley, the only thing that gets in the way of continued success, relevance, and impact is hubris,” Nadella told The Los Angeles Times in 2019.
With a 98% acceptance rate, Nadella was the sixth-best CEO in 2021, according to Glassdoor.
- Zoom, Eric Yuan
Eric Yuan, the founder and CEO of Zoom Video Communications (ZM 0.97%), took his company public in 2019. Less than a year later, when the pandemic hit, Zoom’s video chat software became the center of the world for talks at work, school, social events, and even weddings and deaths. By March 2020, Zoom held 200 million video meetings daily, up from about 10 million in late 2019.
Yuan’s early ideas helped Zoom become the most popular site for online meetings. His concept for Zoom came to him when he was in college and 10 hours away from his long-term girlfriend, now his wife, in his home country of China. Zoom’s goal is simple: “Make video communication as easy as possible.”
From the pandemic’s start, it was clear that Yuan’s business was very smooth. Zoom was easier to use than its competitors’ tools in places with slow internet connections because it was built to work in the cloud. And even though Zoom got a lot of bad press early in the outbreak because of security and privacy problems, Yuan was praised for being honest and quickly fixing problems. He stopped making any new features until the security problems were fixed.
Yuan’s workers always give him good marks. He won Comparably’s 2021 Award for Best CEO of Diversity based on random employee feedback. On a scale of 100 points, employees of color gave him a 98.
- Berkshire Hathaway, Warren Buffett
Uncle Warren would have to be on any list of CEOs to keep an eye on for long-term investment. Warren Buffett, who will be 91 on August 30, 2021, is still CEO of Berkshire Hathaway (BRK.A 0.6%) (BRK.B 0.63%). However, he lets investment managers Ted Weschler and Todd Combs pick many. Still, buyers from all over the world look over the company’s 10-K reports. “Buffett stocks” increase in value because buyers try to copy Buffett’s investments and hold on to his wise words.
Even if Buffett doesn’t agree with all of Weschler and Combs’ stock picks, you can be sure that he has the greatest standards for the two of them. He has said, “Lose money for the company, and I’ll understand.” “If the company loses even a bit of its good name, I will be cruel.”
Even though the Nasdaq fell in early 2022, Berkshire is still doing well.
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