The Financial Times (FT) outlines its methodology for ranking CEO performance, emphasizing a long-term perspective over short-term stock market fluctuations. Their approach aims to identify CEOs who have consistently created value for shareholders over several years.
Key metrics include total shareholder return, adjusted for country and industry-specific market movements, to provide a more accurate picture of a CEO's individual impact. The FT also considers changes in market capitalization, normalized for inflation and corporate actions like share issues or repurchases, to assess growth in company value.
In recent years, the FT, similar to other ranking methodologies like Harvard Business Review's, has incorporated Environmental, Social, and Governance (ESG) factors into their CEO performance evaluation. This acknowledges the growing importance of sustainable and responsible business practices in contributing to long-term corporate health and shareholder value. The weight given to financial performance versus ESG can vary, but both are critical components of a comprehensive assessment.
