Jensen Huang’s Nvidia bests back-to-back winner Microsoft to be named Fortune 500’s best-led company

For the fourth year in a row, Fortune partnered with Indiggo to publish the ROL100®, a unique ranking that captures the ReturnOnLeadership® of the top 100 companies in the Fortune 500. ReturnOnLeadership® (ROL®) is a metric that evaluates and quantifies key fundamentals previously not measured that are vital to diminish risk and increase success.

To calculate the ROL100 Ranking, Indiggo leverages the framework from its AI platform together with publicly available information to provide an “outside-in” view of Return On Leadership.

The numbers to know

No. 1… AI giant Nvidia took the top spot. It was followed by Microsoft (No. 2), Cisco Systems (No. 3), Delta Air Lines (No. 4), and ConocoPhillips (No. 5).

$111,000… the median EBITDA per employee of companies in the top 25 of the ROL100. While the median EBITDA of companies in the bottom 25 of the ranking is $41,000.

+11.8%… the median three-year revenue growth of companies in the top 25 of the ROL100. While the median three-year revenue growth of companies in the bottom 25 of the ranking is +8.5%.

Big picture

There’s a positive correlation between success and purpose-driven leadership. Despite not directly using financial metrics, such as stock returns, to develop the ROL100 ranking, top-ranked companies tend to outperform lower-ranked companies (see numbers above) in terms of revenue, profit, and growth.

A few deeper takeaways

Nvidia soars.

After back-to-back years at the top of the list, Microsoft was knocked out of the No. 1 spot by Nvidia—whose shares are up a staggering 198% over the past 12 months.

While you might assume that Nvidia made the top spot just because of its massive gains, the ROL100 ranking doesn’t factor a stock’s performance into its methodology.

Instead, Nvidia made the top spot primarily because of its scores for strategic clarity, leadership alignment, and focused action. Nvidia CEO Jensen Huang is doing a sterling job steering the boat.

“Investors are always looking for signals, is now the time to buy or is now the time to sell?… Based on Nvidia’s No. 1 ranking, we see a company with strong leadership fundamentals that has set itself up for long-term success,” Seth Verry, Indiggo’s chief research officer, tells Fortune.

Tech capitalizes on the AI boom, overtakes Healthcare.

In the past three lists, Healthcare had the most companies in the top 25. Not this year.

Among the companies that cracked the top 25 of the ROL100, eight (32%) are in Tech. While five (20%) are in Healthcare.

It pays to invest in forward-thinking leadership.

Over the past three years, the ReturnOnLeadership Index (+49%) has outpaced both the S&P 500 (+26%) and the Dow Jones Industrial Average (+11%).

“What’s exciting about our new S&P [ROL] Index is that investors will now have access to the critical perspective of leadership value creation to guide investment choices—an important lens that has been missing and unquantifiable until now. What’s also exciting is that ROL’s unique and rich data provides a ripe terrain for a broad family of ReturnOnLeadership based indices,” Janeen Gelbart, CEO of Indiggo, tells Fortune.

Lance Lambert

*Methodology: The ROL100 ranking uses publicly available information to assess ReturnOnLeadership scores for the top 100 companies on the 2022 Fortune 500 list. ReturnOnLeadership measures an organization’s capacity for execution through its leaders and managers, based on four fundamental drivers: Connection to Purpose, Strategic Clarity, Leadership Alignment, and Focused Action. For each fundamental, a mix of three to five key indicators is assessed (16 in all) to determine the overall ROL score and ranking for each company.

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