The success or failure of any company/organization depends on its leadership, particularly the chief executive officer (CEO), who is responsible in the over-all management of the company. The character, decision-making, and management strategies of a CEO reveals his capability in achieving the goals of the company. We mentioned many these traits in our article, Best CEOs of 2012.
The year 2012 was an undoubtedly challenging one for many CEOs, due to the instability of the economy worldwide. Some were successful in maintaining the growth of their companies, others struggled, and some others failed and were surrounded with controversies. Finally, we used our own proprietary technology to make the final decisions. The list of the worst CEOs below:
1. Aubrey McClendon of Chesapeake Energy Corporation (NYSE:CHK)
McClendon was likely the most controversial CEO in 2012 because of conflict of interests. Reuters revealed his undisclosed borrowings against his stakes in Chesapeake wells worth $1.1 billion, over the past three years, prompting government regulators to investigate the issue. His extravagant lifestyle while mixing his personal and company interests, and schemes in trying to avoid bidding against Encana in order to lower the land prices in Michigan also made the headlines. He was pressured to resign as chairman of the company, and to terminate the Founder Well Participation Program (FWPP), a benefit that allows him to purchase 2.5% stake in wells drilled by Chesapeake Energy Corporation (NYSE:CHK). Over the past year, the company’s market value declined significantly, and it is facing a cash shortage of $18.6 billion until next year.
2. Brian Dunn, of Best Buy Co, Inc (NYSE:BBY) (Resigned last April)
Dunn served as CEO of Best Buy Co, Inc. (NYSE:BBY) from 2009 until his resignation in April 2012, after the board of directors of the company launched an investigation regarding his personal misconduct, but not related to company’s financial controls or management. He was allegedly involved in an inappropriate relationship with a subordinate. During his leadership, Dunn failed to improve the financial performance of the company, instead the stock value of the company dropped by more than 30 percent. The company suffered $1.7 billion losses during its fourth quarter earnings report, and announced plans to close 50 stores. His turnaround strategy, which is focused on cost cutting, and shares buy back didn’t work. Furthermore, he failed to lead the employees of the company in providing good services to consumers.
3. Andrew Mason of Groupon Inc (NASDAQ:GRPN)
Mason led his company to go public in November last year with an offering of $20 per share. Since its IPO, the stock price of Groupon Inc (NASDAQ:GRPN) dropped by 80 percent. Its lowest price was $2.60 per share within the 52-week range. The stock is currently trading around $4.78 per share. Under his leadership, some executives of the company resigned, almost 650 employees lost their jobs, and businesses complained about Groupon’s business model and payment practices. Recently, Groupon’s executive chairman, Eric Lefkofsky and co-founder, Brad Keywell pushed for his removal as CEO of the company. Many also raised concerns regarding his experience and capability in leading the company.
4. Mark Pincus of Zynga Inc (NASDAQ:ZNGA)
Pincus co-founded Zynga Inc (NASDAQ:ZNGA) and decided to take the company public with a $9 billion valuation in December last year. Since the social gaming company’s initial public offering at $10 per share, the stock price of the company plunged by more than 70 percent to around $2.35 per share. Pincus decided to acquire OMGPOP, an online gaming website for $200 million. The purchase didn’t help improve the company’s finances; instead it wrote down 50 percent of the acquisition price. Pincus failed to lead the company with a clear strategic vision as demonstrated by the departure of some of its top executives including its CMO, Jeff Karp. Pincus admitted that he felt terrible about the company’s situation and sought advice from Apple Inc (NASDAQ:AAPL’s) director and technology veteran, Bill Campbell.
5. Scott Thompson of Yahoo! Inc. (NASDAQ:YHOO) (Resigned after 4 months)
Thompson served as CEO of Yahoo! Inc. (NASDAQ:YHOO) for a short period (4 months). He resigned from his position in May after a scandal relating to his resume. Hedge fund manager, Dan Loeb of Third Point revealed that Thompson’s claim in his resume that he holds a degree in computer science from Stonehill College is a lie. He initiated the filing of a patent lawsuit against Facebook, which was immediately settled by the company after his departure. He also laid off 2,000 employees.
6. Robert “Bob” Diamond, CEO of Barclays (Resigned in July)
Robert “Bob” Diamond became CEO of Barclays Plc (NYSE:BCS) (LON:BARC) in January 2011. Under his leadership, the company had been under pressure over issues on compensation, tax avoidance practices, and its involvement in the Libor Scandal, which prompted his resignation.