Jeff Bezos
Amazon CEO Jeff Bezos at the Fire Phone unveiling earlier this year.

Jeff Bezos and Amazon have been taking it on the chin on Wall Street and elsewhere over the company’s lack of profits. But a new ranking from the elite Harvard Business Review offers a completely different perspective, crunching nearly two decades of financial data and naming Bezos the best-performing CEO in the world.

How is that possible? The ranking looked not at profits, specifically, but at the broader measure of shareholder return, which includes the increase in the company’s market value, driven by its share price.

Through that lens, this is what Amazon looks like over the past decade.

amzn
Chart: NASDAQ

Writes HBR’s Daniel McGinn, “The company’s stock performance since its 1997 initial public offering has been so strong that its share price could have dropped to $250, and Bezos would still rank as HBR’s best-performing CEO.”

The article goes on to offer a view of Bezos in stark contrast with popular opinion.

The other big misconception: that Bezos doesn’t care about profitability. 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. “He’s really focused on cash flow and what kind of return on invested capital is being created,” says Warren Jenson, Amazon’s chief financial officer from 1999 to 2002. Bill Miller, a fund manager at Legg Mason who has held shares in Amazon since it went public, says Bezos shows deep understanding of the point Clay Christensen made in his recent HBR article “The Capitalist’s Dilemma,” which argued that most managers focus on the wrong financial metrics. “Jeff really takes theory seriously—he started out wanting to be a theoretical physicist,” Miller says. “In terms of financial theory, he’s trying to get away from the behavioral problems that afflict other companies” that try to maximize the wrong numbers. Other Bezos watchers go even further: At a time when many large companies (most notably Apple) are hoarding idle cash, shouldn’t we be lauding Amazon’s ability to continually find entirely new industries to reinvest and innovate in, rather than criticizing the losses driven by those outlays?

Read the full piece here, including a Q&A with Bezos and HBR’s take on why so many of the top-performing CEOs are engineers.

Like what you're reading? Subscribe to GeekWire's free newsletters to catch every headline

Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.