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The 10 Biggest CEO Losers of 2013

Which CEOs made the most egregious errors in 2013? Forbes’s Sandy Adams compiled a diverse roster of bosses’ mistakes that cover a range of behavior, from obliterating their companies’ stock value to making appallingly offensive statements that brought ridicule on them and in one case a boycott of the company’s products.

Which CEOs made the most egregious errors in 2013? Forbes’s Sandy Adams compiled a diverse roster of bosses’ mistakes that cover a range of behavior, from obliterating their companies’ stock value to making appallingly offensive statements that brought ridicule on them and in one case a boycott of the company’s products.

Several on the Forbes list, like former Brazilian billionaire Eike Battista, BlackBerry’s Thorstein Heins, J.C. Penney’s Ron Johnson and Sears’s Eddie Lampert, ran their companies’ fortunes into the ground, observes Forbes’ Sandy Adams. Other chiefs–like Guido Barilla of the Italian pasta empire, whose anti-gay remarks exploded on social media in Sept., and Tim Armstrong of AOL, who publicly humiliated a longtime employee, firing him during an August earnings call–engaged in single acts of spectacularly bad behavior.

It’s an open question whether these bosses have irreparably damaged their companies, but they hurt their own reputations and demonstrated to the world that they were terrible leaders, at least in the moment. (Some of her judgments, such as those about Steve Ballmer, may strike some as a bit harsh.) Adams notes that five out of ten of them still have their jobs, despite either serious reputational damage or the fact that their companies are floundering. At Sears, chairman and CEO Eddie Lampert has presided over losses of $4.5 billion in the last two-and-a-half years, but he hasn’t seen fit to step aside. At least one of the worst performers, Microsoft’s Steve Ballmer, who squandered his company’s value by failing to innovate, found the wisdom to leave his post.

Adams compiled her list in conjunction with Forbes colleagues and “professional CEO-watcher,” Sydney Finkelstein, a management professor at Dartmouth’s Tuck School of Business and author of 11 books, including Why Executives Fail. He composed his own list of the five worst CEOs of the year. To this she also turned to two professors at Kellogg School of Management, Daniel Diermeier and Harry Kraemer, who is himself a former CEO, of Baxter International, and Richard Levick, a Forbes contributor who runs Levick Strategic Communications, a crisis communications firm in Washington, D.C. The list of Adams’ top ten 2013 screw-ups, is brief and in no particular order.

1. Eike Batista, Chairman and CEO, EBX Group

  • Destroyed tens of billions of dollars in shareholder value. He ended the names of his companies with the letter “X” to signify the coming multiplication of shareholder wealth. The companies did the opposite.
  • Oil company OGX filed for bankruptcy in October after it failed to produce a fraction of the 10.8 billion barrels Batista had promised.
  • A week later shipbuilder OSX, whose fortunes depended on OGX, also went bankrupt. Both OGX and OSX have debts greater than their assets. Their stock prices have dropped 95% in one year.
  • In the space of a year Batista lost most of his personal wealth, once worth $30 billion and now less than $400 million
  • Blamed the CEOs of each of his companies for the problems he created.

2. Ronald Johnson, former CEO, J.C. Penney, pushed out in April

  • Former head of Apple’s retail business and former executive at Target, failed to turn around ailing department stores.
  • Failed to test changes before implementing them: Tried to take company upscale by eliminating discounts and promotions. Introduced new logo and ad campaign. Customers balked.
  • Profitable when Johnson took the helm, the company registered steady losses throughout his tenure.
  • Stock slid from high of $42 during his tenure to $14 when he left.

3. Eddie Lampert, Chairman and CEO, Sears Holdings

  • The hedge fund manager who took Kmart out of bankruptcy in 2003, Lampert acquired Sears for $11 billion and merged the companies in 2005 to create Sears Holdings. Though the company was floundering, he took over as CEO in February.
  • Invested in technology and the company’s membership program but failed to invest in stores and marketing.
  • Sales fell for 27 straight quarters; the company had a net loss of $800 million through the first three quarters of this year.
  • Racked up $7 billion in debt against $600 million in cash.
  • Pursued a failing strategy to cut costs, sell off assets and buy back stock.

4. Thorsten Heins, former CEO, BlackBerrry, ousted in November

  • After the company, formerly called Research in Motion, slid from a market share of nearly half the smartphone market four years ago to just 1.5%, Heins came on board and said no drastic changes were needed.
  • Bet on two new devices using the BlackBerry 10 operating system. The phones flopped. Critics said they used two-year-old technology.
  • Company reported a $1 billion quarterly loss last summer. Cut thousands of employees.
  • Botched an offer from Fairfax Holdings, a Toronto insurance investment company, which wanted to buy BlackBerry for $4.7 billion.
  • Stock fell nearly 60% during his 22-month tenure.

5. Steve Ballmer, outgoing CEO, Microsoft

  • Since taking over as CEO from Bill Gates in 2000, grossly underestimated the shift from PCs to smartphones and tablets.
  • Missed the opportunity to introduce successful music player (know anyone who owned a Zune?)
  • Failed to compete with Google (“Bing” is not a verb).
  • Failed to capitalize on dramatic growth in emerging markets like China, India, Russia and Brazil.
  • Though Microsoft’s stock advanced this year, it fell 36% during Ballmer’s tenure.

6. Guido Barilla, Chairman, Barilla

  • On an Italian radio show, the fourth-generation chairman of the world’s largest pasta maker said, “I would never make a spot with a homosexual family.”
  • He added: “Not out of a lack of respect but because I do not see it like they do. [My idea of] family is a classic family where the woman has a fundamental role.” Said he supported gay marriage “but not adoption in gay families.”
  • Apologized on the 136-year-old company’s website, but made things worse when he continued to insist that traditional families are associated with the Barilla brand: “Barilla in its advertising has always chosen to represent the family because this is the symbol of hospitality and affection for everyone.” In other words, gay families aren’t families.
  • Multiple gay rights groups, including Equality Italia and Gay & Lesbian Alliance Against Defamation (GLAAD), called for a boycott of Barilla.

7. Robert Benmosche, CEO, AIG

  • Took a controversial stance in support of $450 million in bonuses that AIG paid to employees who worked in the unit responsible for massive losses at the insurer. The U.S. government spent $173 billion to bail out the firm following the 2008 financial crisis.
  • Made a huge public relations blunder in September when he said to the Wall St. Journal in an interview that criticisms of those bonuses were as bad as Southern white supremacists lynching African-Americans.
  • Said the criticism of the bonuses “was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that — sort of like what we did in the Deep South. And I think it was just as bad and just as wrong.”
  • After Rep. Elijah Cummings (D-MD) called for his resignation, Benmosche met with the congressman and issued a non-apology apology, describing, “the enormous fear AIG employees felt about their safety and the safety of their families because people in positions of public responsibility were actively encouraging the vilification of our people.”

8. Chip Wilson, former Chairman, Lululemon, resigned in December

  • In November, told Bloomberg TV that the reason the yogawear company’s pants sometimes pill is that “some women’s bodies actually just don’t work for it. . . they don’t work for some women’s bodies,” suggesting that overweight customers shouldn’t wear Lululemon clothes.
  • Like Benmosche, offered a teary non-apology apology on YouTube, saying, “I’m sad. I’m really sad. I’m sad for the repercussions of my actions,” as though he wanted people to pity him because his original comments drew ire.
  • The comments about women’s bodies were just the most recent in a series of offensive statements over time. Back in 2004 he reportedly said that he named the company Lululemon because he thought it was funny to watch Japanese people try to pronounce the letter “L.”
  • Reportedly said in 2005 that third-world children should be allowed to work in factories because they need the money.

9. Tim Armstrong, CEO, AOL

  • During a conference call to 1,000 employees of AOL’s struggling news service, Patch, AOL CEO Tim Armstrong suddenly lost his temper and publicly fired Abel Lenz, an employee who was videotaping the event.
  • Sent a weird statement to employees after the fact, saying he made a mistake when he publicly fired Lenz (Lenz didn’t get his job back, though Armstrong called him to apologize).
  • Armstrong himself underlined the inappropriateness of his reaction by telling employees in the same conference call, “I don’t care what the press says, I don’t care if people leak information,” seemingly inviting Lenz and others to tape the call.

10. Greg Gopman, CEO, AngelHack, stepped down in October

  • In December, Gopman reportedly posted the following on his Facebook page: “Just got back to SF. I’ve traveled around the world and I gotta say there is nothing more grotesque than walking down market st in San Francisco. Why the heart of our city has to be overrun by crazy, homeless, drug dealers, dropouts, and trash I have no clue. Each time I pass it my love affair with SF dies a little.”
  • Originally from Florida, he continued: “The difference is in other cosmopolitan cities, the lower part of society keep to themselves. They sell small trinkets, beg coyly, stay quiet, and generally stay out of your way. . . In downtown SF the degenerates gather like hyenas, spit, urinate, taunt you, sell drugs, get rowdy, they act like they own the center of the city… It’s a disgrace.”
  • The next day he wrote the following on Facebook: “Last night, I made inappropriate comments about San Francisco and its less fortunate citizens on Market st. I’m really sorry for my comments. I trivialized the plight of those struggling to get by and I shouldn’t have. I hope this thread can help start an open discussion on what changes we can make to fix these serious problems.”
  • After a backlash on Facebook and Twitter, a December 12 post on AngelHack’s blog from Sabeen Ali, says that Gopman resigned in October, distancing the company from “this unfortunate event.”
  • Gopman appears to have taken down his Facebook page, so there is now no trace of his original statement or apology. But the damage was done.




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