This Is One Incredible CEO
Jul 25th 2012 9:47AM
Updated Jul 25th 2012 9:52AM
The Motley Fool's readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I've decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholder and the public first and are generally deserving of praise from investors. For reference, here is last week's selection.
This week we'll take a look at why Lenovo Group (NASDAQOTH: LNVGY.PK) Chairman and CEO Yang Yuanqing is truly a class act.
Kudos to you, Mr. Yuanqing
Pop quiz: When was the last time you or someone in your family bought a personal computer? Tick, tock, tick, tock -- buzzzz! Time's up! Chances are you probably can't remember, because smartphones and tablets are widely dominating today's market and are the primary reason PC makers are reaching for any branches of growth they can find.
Dell (NAS: DELL) , for instance, recently spent $2.36 billion to push further into the enterprise software business by purchasing Quest Software (NAS: QSFT) . Hewlett-Packard (NYS: HPQ) , the world's largest PC maker by market share at 14.9%, is trying everything under the sun to reinvent itself (which apparently includes playing musical chairs with its CEOs).
Despite the cloud hanging over this industry, Lenovo shines through. Lenovo, which purchased IBM's (NYS: IBM) PC business in 2005, has transformed itself from a relative afterthought into the No. 2 PC company by market share with 14.7% of global sales. By contrast, Dell saw its PC shipments fall by 11.5% in the second quarter and currently ranks fourth in total PC market share behind Acer, Lenovo, and HP.
Based out of China, Lenovo has taken advantage of an inexpensive labor force and catered to a rising middle class in China to drive sales. Whereas industrywide PC sales are flat, Lenovo's surged 35% last year as profits skyrocketed 73%!
A step above his peers
It's great that Lenovo has performed so well under Yuanqing's leadership, but there's another reason that he is such a remarkable leader: his appreciation for his employees.
Many of you have probably worked for a company that offered you a profit-sharing plan, gave you paid vacation time, or perhaps even divvied out bonuses. But when was the last time your CEO offered to share some of his or her own wealth with you?
That's exactly what Yuanqing did earlier this month when he announced that the $3 million bonus he was entitled to receive due to his company's outstanding performance would be better put to use if it were distributed among some 10,000 non-management employees within his company. What amounts to $314 per employee may not sound like a lot, but with skilled wages running considerably lower in China than in the U.S., it's a big deal. In addition, what better way is there to improve employee loyalty than to reward those employees at every rung of the corporate ladder?
When asked what the motivation was behind the move, Lenovo spokesperson Jeffrey Shafer said his CEO felt it was only right to "redirect [the money] to the employees as a real tangible gesture for what they [had] done."
Two thumbs up
How's that for a feel-good CEO? Yang Yuanqing reminds us that not every CEO is self-absorbed, and he understands that employees from the bottom up are helping to bring Lenovo one step closer to being the world's biggest PC maker by market share. It's a truly classy move, and one that gets two sincere thumbs up from me.
A big thanks to tweeter Daniel Miller for suggesting Yang Yuanqing for this week's incredible CEO. Do you have a CEO you'd like to nominate for this prestigious weekly honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just might see your nominee in the spotlight.
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The article This Is One Incredible CEO originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He loves giving credit when credit is due. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of International Business Machines. Motley Fool newsletter services have recommended creating a synthetic long position in International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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