Fortune Most Admired Companies, IBM Revenue Growth: CEO Daily for January 19, 2018

Good morning.

Great reputations are hard to build, but it turns out they are also hard to lose. That’s why Fortune’s World’s Most Admired list, which ranks companies based on their reputation among other business leaders, shows such stability from year to year. Top of the list this year, for the 11th year in a row, is Apple. No. 2, for the second year running, is Amazon. Alphabet, Berkshire Hathaway, and Starbucks fill out the top five.

But while reputations are hard to lose, it’s not impossible. GE dove out of the top ten this year, plummeting from No. 7 to No. 30. On the upside, both Adidas and Lockheed Martin broke into the top 50 for the first time.

Among company leaders, Mark Zuckerberg got most mentions as “the most overrated CEO,” while Satya Nadella was voted “most underrated.” (Jamie Dimon and Elon Musk made top five on both lists!)

And since it’s Friday, some feedback:

C.E. was keen enough to recall that in August, after Trump’s business advisory councils exploded, I wrote that the events “greatly reduced any chance that the president and Congress have of enacting serious legislative reforms.” Wrong about that.

And J.C. busted my chops for mentioning yesterday that it’s hard to know how much of Apple’s promised spending in the U.S. “would have occurred even without the tax cut.” Says he: “You give no credit to the president.”

So let me be clear: the tax bill wouldn’t have happened without Trump, and all evidence suggests it is boosting U.S. investment and growth. Only question is whether it was worth the cost, which will be decided by future generations, who got stuck with the bill.

News below, including IBM’s first revenue growth in 23 quarters.

Top News

At Long Last

IBM ended its five-year streak of declining quarterly revenue on Thursday, reporting $22.5 billion in fourth-quarter sales, up 4% from the same quarter last year. But Wall Street hardly cheered. IBM’s shares dropped 3.4% in after-hours trading. Fortune

Amazon's Top 20

Amazon on Thursday whittled its list of potential sites for its much-hyped second headquarters from 238 bids across North America to just 20. The finalists include 19 metropolitan areas in the United States and one in Canada. Fortune

Countdown to a Shutdown

The U.S. government is careening toward another possible shutdown. (Cue The Washington Post countdown clock.) House Republicans on Thursday passed a stopgap spending bill to keep the government open for four more weeks, but Senate Democrats are poised to block the measure due to lack of progress on an immigration deal. Here's a reminder of what happens if the federal government does indeed close up shop. Washington Post

A Board Boost

Facebook on Thursday named its first African American board member as it tapped retiring American Express CEO Kenneth Chenault. His appointment makes good on COO Sheryl Sandberg's statement to the Congressional Black Caucus in October that the social network was looking to add a black board member. The group had criticized Facebook—along with other tech giants—for failing to fix the lack of diversity in Silicon Valley, especially in high-paying roles and executive leadership positions. Fortune

Around the Water Cooler

What Went Wrong at Uber?

The latest Bloomberg Businessweek cover story dives into "the fall and fall and fall" of ex-Uber CEO Travis Kalanick. It "was a lot weirder and darker than you thought." Bloomberg

A Pregnant Prime Minister

"We thought 2017 was a big year!" With that, New Zealand's newly-elected Prime Minister Jacinda Ardern announced that she's expecting a baby in June. The 37-year-old will be the first prime minister since Pakistan’s Benazir Bhutto in 1990 to give birth while in office, and she's already fielding questions about "balancing" her work with motherhood. "It's what ladies do," Ardern told a reporter today. Fortune

A New Kind of Drug Company

A coalition of major U.S. hospitals is taking the matter of high drug prices into its own hands with a unique project: Creating a nonprofit generic drug company run by health systems. Intermountain Healthcare is spearheading the initiative that is being done in consultation with the Department of Veterans Affairs and has already garnered support from some of the country’s biggest hospital chains. Fortune

Forever Young

Mandatory retirement may seem like a thing of the past, but top-tier accounting firms still abide by the practice, with many requiring partners to exit at ages 60 to 66. One firm, PKF O’Connor Davies, is bucking that trend, deliberately hiring partners who have aged out elsewhere. The firm says older employees still have tremendous value. At the same time, research shows 60% of retirees would return to work if a job was flexible. Wall Street Journal


This edition of CEO Daily was edited by Claire Zillman. Find previous editions here, and sign up for other Fortune newsletters here.

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