Biggest CEO successes and setbacks: 2023’s triumphs and 2024’s challenges

Such an effort at accountability can teach us a lot about the future, as glancing backward is often a valuable guide to the path forward. While there can be surprise technological and market disruptions, classical Newtonian mechanical physics’ suggestions that trajectories are the flight paths determined by mass positioning, direction, and momentum as a function of time can help us make accurate predictions.

Last year’s “nice” and “naughty” CEO lists aged rather well. One CEO from last year’s hot seat list, Changpeng Zhao of Binance, ended up getting indicted for money laundering and stepping down, while another, Sandeep Mathrani, resigned right before WeWork declared bankruptcy. On the other hand, our best-ranked CEO last year, Satya Nadella, steered Microsoft to another year of record heights with the stock up 75%, while the rest of the trifecta of our top CEOs, Arvind Krishna of IBM and Jane Fraser of Citi, continued their successful turnarounds with their stocks up double digits as well. Each of last year’s winners surely warrants honorable mention this year as well, but here is our new list of our top three CEOs from 2023.

1. Marc Benioff of Salesforce: Back in command–and building the new Salesforce

There is no CEO who has successfully pulled off a more dramatic reversal in sentiment and narrative over the last 12 months than Marc Benioff.

At the start of the year, a horde of activist investors including Third Point, Elliott Management, Starboard Value, ValueAct, and Inclusive Capital were piling into Salesforce amidst several well-publicized stumbles, including a co-CEO transition that did not work out, as well as the crumbling of former co-CEO Bret Taylor’s pet project, the $27.7 billion acquisition of Slack.

That was then. Now, Marc Benioff, fully back in command, has brought Salesforce back to life. The results are clear–with Salesforce stock doubling over the last 12 months from $130 to $260, near all-time highs, and total revenues soaring past $30 billion for the first time. Benioff has continued Salesforce’s top-line growth while also driving bottom-line profitability, with earnings per share (EPS) nearly doubling this year alone thanks to 30% operating margins and $8 billion in net income. No wonder those activist investors have now quietly surrendered with nary a word.

A key driver of Salesforce’s remarkable performance was what Benioff called “the summer of AI.” Salesforce has been one of the biggest winners from the AI boom, with 20% of the Fortune 100 using Salesforce’s proprietary AI Einstein GPT for data management. Benioff also expertly drove a needed reorganization without compromising Salesforce’s core values, exemplified by Salesforce’s famous 1-1-1 model: dedicating 1% of the company’s equity, 1% of its product, and 1% of its employees’ time towards philanthropy and community service. Salesforce’s social impact record has been remarkable, with more than $240 million disbursed and product donations for 40,000 nonprofits, as well as 3.5 million hours of community service by Salesforce employees. This comes on top of personal acts of philanthropy by Benioff, such as his recent donation of 300 acres of land in Hawaii towards affordable housing, as well as many other instances that are not publicly reported.

All this adds up to a sustainable and scalable recipe for the new Salesforce–leaner, more profit-focused, and marrying AI with its existing data cloud services–which will continue to power Salesforce ahead for years to come. With Marc Benioff firmly entrenched at the controls again, Salesforce is back for good.

2. Pat Gelsinger of Intel: The turnaround is real–and Intel is primed for takeoff

One might be forgiven for doing a double take here. Wait. Intel? Really?

After all, it’s been nearly three decades since the legendary Intel CEO Andy Grove was chosen by TIME Magazine as its Person of the Year, for “being responsible for the amazing growth in the power and innovative potential of microchips….he merits a place alongside the great business leaders of the 20th century.” In the decades since Grove’s retirement, Intel’s challenges have been well-publicized, with the company missing entire waves of technology trends, ranging from the rise of mobile chips to cloud computing, made worse by excessive c-suite churn with a succession of short-stinted CEOs. Intel stock has still never returned to the record highs it hit during the dot-com bubble in 2000.

Against this backdrop, Pat Gelsinger clearly had his challenges cut out for him when he returned to Intel as CEO in 2021, after a successful decade as CEO of VMware. The markets, as did we, immediately recognized Gelsinger as an inspired choice to lead Intel–and the stock rose nearly 10% on the news of his appointment.

After all, Gelsinger is an authentic Intel veteran through and through, with his prior 30-year career at the chips giant marked by a rapid rise up the ranks through various technical engineering and leadership roles, culminating in his appointment as Intel CTO in 2001. As CTO, Gelsinger was personally mentored by the legendary Grove and led key technology developments such as Intel Core and Intel Xeon processes, as well as 14 chip projects.

But from the outset, Gelsinger was transparent that the turnaround would take time as he cleaned up many inherited challenges and slashed Intel’s dividend for the first time in three decades to fund long-delayed business reinvestment. Now, nearly three years into Gelsinger’s tenure, the turnaround has finally reached an inflection point, as Intel starts to reap the tangible benefits of its new investments.

Intel’s core business is turning around, with personal computer (PC) sales rebounding after troughing last year, fueled by continued innovation. This year, Intel launched their fifth generation CPU, called Emerald Rapids, which has an average performance increase of 42% compared to the previous generation, as well as a new Intel Core Ultra Processor called Meteor Lake, which is 12% more powerful than any competitors’. No wonder Intel stock roughly doubled in 2023 from just over $25 to $50.

Part of that recovery has been fueled by Intel’s AI innovation with the launch of a full range of AI-enabled processor products, on top of over 300 AI-enabled features on their PCs offering more specialized and efficient functions and over 100 AI software partners including Adobe, Dolby, and Zoom. Intel expects to ship more than 100 million AI-enabled PCs by 2025.

Intel’s triumphs are not only great for Intel, but great for America. The chipmaker is providing a blueprint for the Made in America renaissance by investing over $100 billion into U.S. manufacturing facilities not just in Silicon Valley but across the heartland in Arizona, New Mexico, Oregon, and Ohio. These include much-needed semiconductor foundries which will help reduce U.S. reliance on Asian chips, with Intel partnering closely with U.S. policymakers on the CHIPS Act to build out more balanced and resilient supply chains. The impact of Intel’s manufacturing investments are already being felt across the country, with Intel contributing over $102 billion annually to U.S. GDP, supporting over 721,000 American jobs, and directly employing 52,000 people in the U.S.

On top of Intel’s triumphs, Gelsinger provides an inspiring model of personal leadership. He is vocal about his spiritual foundations and his principles anchored in faith. Make no mistake about it–Intel’s turnaround under Pat Gelsinger is now real and tangible, with 2023 just the start of a sustained acceleration for Intel.

2. Karen Lynch of CVS: Boldly reinventing drug pricing to bring down costs for consumers

Unlike the others on this list, 2023 was another strong year for CVS but perhaps not particularly extraordinary at first glance, at least if measured by its flattish stock price.

What Karen Lynch of CVS deserves special credit for is something far more foundational: completely overhauling and reinventing the drug pricing business model to bring down consumer costs.

Some background context is called for, as the drug pricing ecosystem is notoriously convoluted, and difficult to understand. As drug pricing has emerged as an increasingly contentious political issue (after all, Americans spent more on prescription drugs last year–about $1,200 per person or $370 billion total–than any other country), many detractors have called into question the role played by pharmacy benefit managers (PBMs), effectively the middlemen who negotiate drug pricing with pharmaceutical manufacturers, pharmacies, and health insurers, ostensibly on behalf of consumers. Those critics argue that, in reality, the lack of transparency and opaqueness surrounding PBMs means there is little clarity around drug pricing, and the role played by PBMs can be less than benign. Some critics argue that PBMs actually push drug pricing upward, not downward due to misaligned incentive structure across the following tenets:

• First, PBMs are incentivized to favor more, not less, expensive drugs, because this means higher rebates (usually set as a % of drug price) for PBMs; and thus are more likely to push to include higher rather than lower-priced drugs on lists of prescription drugs covered by insurance (or, in industry jargon, providing more favorable formulary placement)
• Second, as PBMs demand larger % rebates over time, drug manufacturers offset their own loss in revenue by raising the “list” price of their drugs, which in turn means PBMs pocket larger rebates received from higher-priced drugs, and so forth. In fact, according to one recent study by researchers at the University of Southern California, every $1 increase in rebates leads to a $1.17 increase in drug list price on average. Higher list prices drive up healthcare costs for patients, ranging from higher insurance premiums, higher copayments, and higher Medicaid and Medicare expenses funded by taxpayers.

Defenders of PBMs argue that PBMs are the only explicit allies of patients across the entire healthcare value chain, passing along savings from negotiated drug price discounts to consumers rather than their own bottom line. Regardless of the merits of the arguments on both sides, PBMs have come under increasing political pressure, ranging from an ongoing FTC investigation to congressional scrutiny and proposed legislation, and some independent health insurers are even openly ditching PBMs.

Getting ahead of regulatory pressure is almost always preferable to being pushed to play catch-up, but in this case, Karen Lynch and CVS deserve even more credit for completely transforming their business model, going above and beyond the scope of even the most aggressive legislative proposals by moving to a revolutionary new approach to drug pricing, called CVS CostVantage.

Under this cost-plus model, drugs will be transparently and straightforwardly priced based on the amount CVS paid for the drugs, plus a small markup–a sea change from the indecipherable, opaque, and convoluted system of rebates, markups, and bespoke discounts that define today’s PBM system.

Although many details of this new system are still being worked out, CVS (as the largest PBM in the nation with over 33% market share) deserves credit for the courage to move first and boldly, setting the tone for the entire industry.

While her bold moves to revolutionize drug pricing are worth celebrating, being a trailblazer is nothing new for Lynch. Since she took over as the first female CEO in the history of CVS in 2021, annual revenues have grown 20% from less than $300 million to over $350 million today. No other woman has ever run a company with $350 million in revenues–and CVS remains the largest woman-run Fortune 500 company.

CEOs on the hot seat

In stark contrast to the three CEOs who are being celebrated for their accomplishments, these three leaders on the hot seat have led their high-flying enterprises towards crash landings. After a year of struggles in 2023, they’ll need to turn around their fortunes in 2024.

1. Linda Yaccarino of X/Twitter: A sinking ship?

Since Linda Yaccarino took the job as CEO of X, formerly known as Twitter, the already long list of troubles facing the social media company has somehow only grown longer. X’s own investors admit that its valuation has plummeted over 70% to less than $13 billion from the $44 billion paid by Yaccarino’s capricious boss Elon Musk only a year ago. Advertisers are fleeing in droves with more than 200  boycotting the platform representing nearly $100 million in revenues. Just last month, we sat in the front row of Andrew Ross Sorkin’s DealBook Summit, inches away from Musk when he outrageously taunted X advertisers to “go f*** themselves” amidst rampant unchecked hate speech and misinformation across the platform according to Steve Brill and Gordon Crovitz’s Newsguard.

So far, Yaccarino seems either unable or unwilling to restrain her boss from his worst impulses while failing to reassure advertisers that all is under control. For all his genius, Musk has been an unvarnished disaster running this social media company, erratically pulling out all the wrong moves. What does the rebranding of Twitter into X even mean anyway? X as in X-rays, or Xbox, or Xfinity, or x the symbol that represents the unknown in mathematics?

Ironically, one of the only things working in Yaccarino’s favor is the ineptitude of her competition. The much-ballyhooed Threads is unraveling under the weight of its own hype, while other wannabe rivals such as Mastodon and Blue Sky linger in relative obscurity after overpromoting their potential. The prospects do not look promising for Yaccarino to turn around X by, perhaps most importantly, containing Musk.

2. Ryan Cohen of GameStop: Meme stock hype collides with cold hard reality

It has been quite a fall to earth for Ryan Cohen, the meme stock activist investor, since his high-flying days as a meme stock pied piper playing to crowds of bored Reddit day traders during the depths of the pandemic.

Now, Cohen faces the very real specter of GameStop’s demise. Not only are GameStop shares down 95% since 2021, but the underlying business also continues to deteriorate rapidly amidst three consecutive years of declining revenues and profits due to the general decline of physical software sales.

GameStop’s appointment of none other than Cohen himself as CEO in September 2023 inspires little confidence, since, in the words of Wedbush analysts, “the appointment of the controlling shareholder reflects the difficulty GameStop has had in attracting competent executives…we are unaware of any recruiting activity, and can only surmise that the company could not convince any competent replacements to jump onto the sinking ship.”

Nothing seems to have worked for Cohen since he took ownership of GameStop, as Wedbush points out. He recruited several top senior Amazon executives in early 2021, only to fire them months later. Cohen then tried to grow GameStop’s sales, only for sales to continue to plummet. Next, Cohen tried out an NFT Marketplace initiative, which is now flailing and apparently winding down. Then Cohen initiated what Wedbush called “one of the most inane decisions we have ever seen,” by having GameStop authorize him to invest the company’s cash in other stocks as if GameStop were a mutual fund.

Sadly for GameStop, Cohen’s track record as an investor is plainly terrible. He seems to have made his greatest profits through his antics at the now-bankrupt Bed Bath & Beyond, and his “sketchy” timing put him into the crosshairs of a Securities and Exchange Commission (SEC) investigation in addition to several shareholder lawsuits for fraud and a separate case accusing him of “short swing profit” in federal court. Cohen’s lawyers deny any wrongdoing.

Perhaps Cohen can meme-stock GameStop’s way out of its fight to survive once more, but with all his miscues and baggage piling up, the pied piper’s magic seems to be wearing thin.

3. Changpeng Zhao of Binance: When is rock bottom?

Astute readers may note that we had Changpeng Zhao of Binance on our list of hot-seat CEOs last year. So why include him again even though he has stepped down? In short, as terrible as 2023 was for Zhao, and it was plenty terrible, 2024 could shape up to be even worse.

Let’s first recap Changpeng Zhao’s 2023. In our note last year, we wrote “CZ seems to be riding high after essentially single-handedly taking down his longtime rival, Sam Bankman-Fried. This leaves Binance as the undisputed largest crypto exchange–yet the downfall of FTX leaves landmines that now endanger CZ more than anyone else….CZ has to engage government regulators from a position of weakness, having never cultivated political ties the way his vanquished rivals at FTX did. Perhaps in 2023, CZ may have cause to regret killing off his rival so mercilessly.”

Our prediction turned out to be prophetic as 2023 brought a series of lawsuits and investigations into Zhao and Binance from U.S. regulatory agencies including the Commodity Futures Trading Commission, the SEC, and the Department of Justice. When the U.S. government filed initial charges against Zhao in March, Zhao publicly dismissed them on Twitter as unworthy of his attention. Despite this bravado, Zhao was forced to plead guilty to violating U.S. anti-money laundering requirements after evidence emerged that Binance encouraged U.S. users to obscure their location and avoid complying with U.S. laws. Zhao stepped down as Binance CEO and Binance agreed to pay fines totaling $4.3 billion.

The one silver lining for Zhao from his guilty plea was that Binance was allowed to continue to operate– for now–with Zhao remaining its owner. Though Binance remains the largest global crypto exchange, warning signs abound that its survival is at risk, with reports of executives and employees fleeing Binance in droves and trading volumes dwindling, which can turn into a self-fulfilling death spiral for any financial platform. Meanwhile, competitors such as Coinbase are rapidly taking market share. Binance’s best bet for survival is to sever all ties with Zhao, but its owner seems unlikely to get out of the way. Zhao is history–and Binance may not be too far behind.

Each of these embattled CEOs has their work cut out for them, with at least some opportunity for a turnaround for their companies, no matter how slim the chances. Meanwhile, 2023’s top-performing CEOs are off to the races, vying to lead their companies to another year of new records.

Drawing straight-line projections is dangerous. It has failed prognosticators who missed the 1990s rise of China’s economic power, Russia’s kleptocracy enabling Vladimir Putin’s brutal ascendance, the ubiquitous cross-sector transformation of the internet, and the unknowns of the AI evolution. Yet still for these CEOs, good and bad, the past is likely a prologue to the future.

Jeffrey Sonnenfeld is the Lester Crown Professor in Management Practice and Senior Associate Dean at Yale School of Management. He was named “Management Professor of the Year” by Poets & Quants magazine.

Steven Tian is the director of research at the Yale Chief Executive Leadership Institute and a former quantitative investment analyst with the Rockefeller Family Office.

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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.