A lot of deserving CEOs could carry the mantle of most underrated. My list of underrated, underappreciated CEOs doesn't contain household names. They're not featured on magazine covers or otherwise lionized in the media -- they're underrated, after all.

Of all the ways to evaluate a CEO's job performance, the worst is to tie it to short-term stock performance. All kinds of variables can make this criterion misleading: a bad stock market, an overvalued stock at the beginning of a CEO's tenure or poor sector fundamentals, to name a few.

First and foremost, the best CEOs serve and protect shareholders. That is evidenced by:

    Careful capital allocation: The biggest threat to shareholders is a CEO who wastes capital in acquisitions, ill-advised business expansion, etc. Disney (DIS) - Get Report CEO Michael Eisner's record, for example, is awful. He's wasted shareholder capital on baseball and hockey teams and on the purchase of ABC and the Fox Family network. It wasn't that long ago that Disney paid executive Michael Ovitz $90 million for little more than a year of work, presumably getting no return on this capital. Minimal share dilution: In a prior column, I called dilution from options "the scourge of investment capital." This is particularly true in an era of low returns in the stock market. Giving away 5% annually in stock options, for example, may be giving away all of the progress in the underlying business in any given year. Strong balance sheets: CEOs protect the property of equity holders by protecting the balance sheet, easily the most overlooked financial statement on Wall Street.

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Arne Alsin is the founder and principal of Alsin Capital Management, an Oregon-based investment advisor specializing in turnaround situations. At time of publication, neither Alsin nor ACM held a position in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Alsin appreciates your feedback and invites you to send it to

arne@alsincapital.com.

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