Great engineers love solving problems. Fortunately for Advanced Micro Devices (AMD), Lisa Su is one of them, and she has a knack for dealing with the semiconductor industry’s hardest ones.
After getting her doctorate in electrical engineering from the Massachusetts Institute of Technology, Su, 49, played a key leadership role in
groundbreaking work using copper to replace aluminum interconnects in computer chips, making them faster and more energy efficient.
In 2012, the year she joined AMD, the company was in trouble. AMD lost more than $1 billion as its products drastically underperformed Intel’s. But Su was undaunted and excited to come aboard. “I’ve always been attracted to solving really tough problems,” she says. “Problems actually create opportunities.”
After becoming CEO in October 2014, she quickly refocused the company on its core high-performance computing business, establishing an ironclad policy of meeting commitments to customers.
With just a fraction of the research-and-development budget of
(INTC), its main rival, AMD made a few bold bets on chip-manufacturing technologies. They’re now paying off. Revenue grew by more than 20% in each of the past two years, and AMD earned $337 million in 2018. Ian Cutress, senior editor at AnandTech, says the fruits of AMD’s investments in seven-nanometer technology and modular chip designs are paying off at a time when Intel is struggling to offer less advanced 10-nanometer chips. Analysts predict that AMD’s Zen 2 chips, coming out in July, will offer market-leading performance at nearly every price point.
During Su’s tenure as CEO, AMD stock has risen more than 800%. The shares are up 80% this year through June 10, and AMD was the No. 1–performing stock in the S&P 500 index last year.
Su’s technical expertise and intuition were critical to this resurgence. “I love spending time with the engineers, going into the lab, and getting a feel for what the real challenges are, because it just helps me make better decisions on the business,” she says.
Spoken like a true problem solver.
• CHANGE AGENTS
General Motors (CEO since 2014)
If strong stock returns were the only mark of a top CEO, Barra, 57, wouldn’t come to mind.
(GM) shares are lower now than when she took over in January 2014. Even with dividends, they have returned just 25% cumulatively, versus 80% for the
The World’s Best CEOs
But under Barra’s watch, earnings per share have doubled. Even with demand for North American light vehicles slumping, GM’s profits are expected to rise slightly this year. Credit goes to her decisions to cut back on sedans and go full-throttle on trucks, and to exit Europe. GM estimates it can break even now on North American demand of 10 million to 11 million vehicles a year, versus a recent pace above 17 million. When will investors warm to GM, recently the cheapest stock in the S&P 500, relative to forward earnings? Perhaps if it stays profitable through the next recession. Or sooner, with a spinoff of autonomous-driving unit Cruise. Bought under Barra for $581 million, it recently raised $1.15 billion in equity, implying a $19 billion valuation—versus $50 billion for all of GM.
Ulta Beauty (CEO since 2013)
Most retailers are struggling to compete with
(AMZN). But not
(ULTA), which has almost 1,200 cosmetics and beauty-products stores in the 50 states.
Its shelves feature more than 500 brands of makeup, hair products, fragrances, and other items, ranging from upscale names like NARS to mass-market labels like Maybelline to private-label goods. Ulta has also paired with celebrity Kylie Jenner to sell an exclusive makeup line, which has been a big traffic generator.
Dillon has attributed Ulta’s growth to a focus on customer loyalty and the shopping experience. Ulta’s rewards program boasts almost 33 million active members. The company has also pushed digital offerings, including a revamped mobile app that makes personalized style recommendations. Small wonder, in an age that demands perpetual Instagram readiness, Ulta sales have risen 500%, to $6.7 billion, in the past 10 years.
McDonald’s (CEO since 2015)
(MCD) shareholders are lovin’ it under U.K-born Easterbrook, 51. The stock price has doubled, as investors who previously paid less than 20 times earnings for shares have decided they’re now worth more than 25 times. A sales slump has given way to years of gains. Last quarter, U.S. same-store sales rose 4.5%.
Easterbrook has reorganized markets to allow good ideas developed in one place to quickly spread to others. France was an early leader in digital ordering kiosks, which have now been installed in half of McDonald’s stores. Other enhancements include mobile ordering, curbside pickup, speedier drive-throughs, and delivery through a partnership with Uber Eats.
This year, McDonald’s bought a data company, Dynamic Yield, which can adjust digital menus for things like weather and trends, and personalize online ordering. The goal: to ensure that McDonald’s stays as relevant for younger eaters as it was for their parents. It’s working.
Tesco (CEO since 2014)
Just after becoming CEO at Britain’s biggest grocer, Lewis, 54, uncovered an accounting problem. The shares plunged.
(TSCO.UK) was already an underdog, having underinvested in its core U.K. grocery business while chasing glory abroad. Lewis embarked on a turnaround that touched almost every part of the business, and scaled back international operations.
At home, he improved service, axed complicated price promotions, and built closer ties with suppliers. “We changed our business from one that’s about running shops to one that’s about serving people,” he says.
Nicknamed Drastic Dave for cost cuts he oversaw while at
(UL), Lewis eliminated 10,000 jobs at Tesco. The shares are up 30% over the past two years.
Data through 5/31/19. Berkshire Hathaway data through 12/31/18.
All returns in U.S. dollars