I could say that I had to think long and hard about this one. I could tell you that I had a tough time considering all the amazing exercises out there and that the decision was close. But these would be lies- The Pull Up is the best upper body exercise in existence, and whatever is in second place is so far off, that it doesn't even warrant any attention.
Why though? What is so special about pulling your chin up over the bar? What does this exercise give you that the bench press or the military press doesn't? It isn't just one thing that makes the pull up (and variations) so powerful, but a unique and rare combination of desirable qualities that easily solidify its position as the best exercise in existence, not just the best upper body exercise. This is my opinion, of course, and it would take me way too long to go into all the benefits, so I'll talk about just a few of these standout features.
Very few exercises can match the pull up in terms of overall muscle recruitment. Muscles of the forearms, shoulders, chest, back, and arms are all trained during the exercise. The pull up generates high levels of abdominal activity, making it an effective ab exercise. Not so obvious is fact that it can recruit the bodies pushing muscles- the pecs and the long head of the tricep. This is surprising to many, but not so if you understand the function of these muscles. All varieties train the biceps and forearms but chin ups in particular elicit bicep recruitment that is comparable to curls. Pull ups are most known for their ability to build a muscular back, and they grow the lats particularly well, but this is also true for the spinal erectors, traps, rhomboids, and rotator cuff. The pull up is the primary exercise used to develop that famously sought after V-taper, making it one of the most favored exercises for sculpting an aesthetic upper body. I cannot think of another upper body exercise that trains so much of the bodies muscle mass to such an effective degree.
The bench press sure has a lot of admirers. I'm not convinced it has enough going for it to secure a second place position, but it certainly has a few desirable qualities, not one of which is its tendency to destroy shoulders. Depending on your shoulder structure, the bench press can be extremely risky. Many people, even with perfect form, develop chronic and/or severe rotator cuff issues from benching. One reason for this is that the bench press does not allow the scapula to move in concert with the humerus. Requiring the shoulders to move heavy loads while being forced into unnatural and dysfunctional mechanics can spell disaster for many people who use the lift. Pull ups don't have this problem. The shoulder can move freely and naturally, and the starting position of the pull up, the "hang", which is integral to the movement, has actually been used (with extraordinary results) for healing damaged shoulders, no doubt some of which can be blamed on the bench press. Check out Dr. John M. Kirsch who's Kauai Study showed positive results in 90 out of 92 patients using the hanging position as the primary therapeutic intervention. The pull up is inherently healthy!
The older I get, the more I feel that keeping good body composition should be a priority for everyone. The pull up is the ultimate litmus test for body composition. Skinny with no muscle? You will struggle with pull ups. Skinny-fat? Not a chance. Fat but muscular? Good luck. How about lean and muscular? Bingo! That is what it takes to be competent with the movement. Traditional barbell lifts reward weight gain, whether it is fat or muscle. Frequently, young guys chasing big bench numbers eventually find themselves chunkier than they would like to be, and become discouraged as their bench numbers plummet while they drop the excess body fat that helped them get their bench numbers up in the first place. Pull ups REQUIRE that you are relatively lean and muscular, and mastering them will make you lean and muscular.
To sum it up, pull ups recruit a ton of upper body muscle, they are easy on the shoulders, and they are an accurate indicator for healthy and athletic body composition. This should be enough to qualify them for first place. If it's not, keep in mind that they also have the ability to be easily and safely loaded, there are multiple variations which emphasize different muscles and keep things fresh, they can easily be scaled down for beginners using resistance bands or isometrics, they are highly functional (climbing over a wall is required in many obstacle courses for Military and Law Enforcement testing), they don't require a spotter for safe "maxing", there is no barbell to drop on your head or pin you to a bench (one of the few ways people actually die in the gym), they can be done while traveling (I do them on a door or tree when I travel), they require minimal equipment, and they can transfer to other cool calisthenics skills, like front levers or muscle ups, if that is what you are in to. What other exercise comes close? See what I mean?