The Motley Fool's readers have spoken, and I have heeded their 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 shareholders and the public first, and are generally deserving of praise from investors. For reference, here's my previous selection.
This week, I'll turn your attention to the world of social media and highlight the CEO of LinkedIn (LNKD +0.00%), Jeff Weiner, who's done a tremendous job growing his company despite many hurdles, while also rewarding his employees along the way.
Source: Coletivo Mambembe, Flickr.
Kudos to you, Mr. Weiner
Sometimes highlighting CEOs in this series can be a bit bittersweet for me, as I've been pessimistic on LinkedIn's share price for quite some time -- and I've been dead wrong, by the way -- but there's little arguing against what Weiner has done for LinkedIn. But it hasn't always been a straight shot higher, as many companies in the social media realm have succumbed to investors' lofty expectations.
Shareholders in online gaming developer Zynga (ZNGA +0.00%), for instance, found out the hard way that getting people to pay for free games is difficult. What's even tougher is making each game a success every time. Zynga shares are down close to 90% from their all-time highs and the company is yet again unprofitable despite cost-saving job cuts that totaled 18% of its workforce.
Things have gone only slightly better for daily deal leader Groupon (GRPN 0.41%), which has seen revenue growth slow to the single digits and is still only producing marginal profits at best. Increased competition and small businesses being less willing to share their profits appear to be the primary culprits that are pressing on Groupon's ability to turn a significant profit. The sad part is that's light-years better than daily deal site LivingSocial, which Amazon.com has made more than one investment into and currently owns a 29% stake in. According to TechCrunch, LivingSocial has raised $918 million in the past six years and, as of its latest quarter, is still churning out cash-burning, hefty losses.
You could even lump Facebook (FB 3.83%) in here for its late jump to the mobile party, which soured its prospects immediately after its IPO and sent shares as low as $18 before they found their footing. Facebook's second-quarter results did demonstrate tremendous growth, with 41% of its revenue coming from mobile, but you can still understand investors' skepticism with Facebook – especially those who were burned following its IPO.
And then there's LinkedIn -- the model of consistency in the social media space. In its recently reported second-quarter results, LinkedIn delivered 59% revenue growth as its membership increased by a brisk 37% to 238 million people. EBITDA also rose by an impressive 76% from the year-ago period. LinkedIn was able to utilize new product offerings, drastically boost its subscriptions (which bring in much-needed recurring revenue), and saw mobile offerings rise by 40% on its way to another record quarter.
LinkedIn's been no slouch overseas, either, with the company receiving 38% of its total sales from international markets. There's still plenty of room for expansion in the U.S., but as both priceline.com and Netflix have shown, overseas markets can pack quite a punch for your bottom-line if you hit them first before your competitors.
A step above his peers
For LinkedIn and Jeff Weiner, it isn't just about increasing sales -- it's about rewarding shareholders, employees, and the community along the way.
As you might have imagined, with LinkedIn being a relatively young company, shareholders probably aren't going to be getting a dividend or perhaps even a share buyback any time soon. The good news is that they aren't likely to complain about it with LinkedIn's share price up a clean 150% from its closing price on May 19, 2011 -- its IPO day. If you purchased shares at any time before August and are still holding now, you have made money!
Source: A Name Like Shields Can Make You Defensive, Flickr.
Where Jeff Weiner really separates himself as a fantastic leader is in the sheer number of perks and benefits that LinkedIn employees enjoy. Social media companies are already well-known for their wacky perks, but LinkedIn just piles them on. In addition to standard health insurance options and a 50% company match on the first 3% that employees contribute to their 401(k), LinkedIn also provides chair massages, a 24/7 onsite gym, afternoon yoga, and regular lectures from prominent guest speakers. LinkedIn also sponsors catered lunches for its employees.
But, perhaps the coolest perk of all is that in February LinkedIn purchased Apple iPad Minis -- the 16 GB $429 model -- for all 3,458 full-time employees! According to Krista Canfield, a senior communications manager at LinkedIn, "[The company] wanted to acknowledge the hard work and accomplishments of all of our employees in 2012. During today's biweekly All Hands meeting, we surprised our employees with iPad Minis as a small gesture of the company's gratitude for their contributions."
Although LinkedIn may not be known for its big donating capacity (yet!), it has also been instrumental in allowing thousands of charities to be seen and heard through LinkedIn events, giving them a better chance of raising money for their cause.
Two thumbs up
LinkedIn has completely transformed the meaning of the business card and allowed professionals to connect on a much broader scope thanks to the Internet. By thinking outside the box, it's been able to handily surpass many of its social media peers and has shown very little sign of slowing down on the growth front. With shareholders on its side and an employee base that loves their CEO -- Weiner has a 93% approval rating on Glassdoor-- I see no reason not to give Mr. Weiner two very enthusiastic thumbs up.
