The Worst CEOs of 2015
After consulting with Santa, I’ve determined which CEOs of public U.S. companies were naughty this year, and you know what that means. It’s time for my annual worst CEOs list. These are the chief executives who I think should have gotten lumps of coal in lieu of lofty compensation packages in 2015.
Before we dive in, a couple of caveats. Don Mattrick was ousted from Zynga too early in the year (April) to make the list. While Tony Hsieh has certainly made a mess of things at Zappos, the online retailer is a subsidiary of Amazon, so he too fails to qualify. And if Theranos were a public company, CEO Elizabeth Holmes would definitely have made the cut.
With that out of the way, let’s dive right into the land of dysfunctional executives, plunging share prices and bloody red ink, counting down from …
No. 7: Marcelo Claure, CEO, Sprint
Claure definitely inherited a mess from chief boondoggle officer Dan Hesse. But he still managed a boneheaded move right out of the gate, paying about a dozen consultants $25 million for five months of work in the midst of a multibillion dollar cost-cutting effort. And the lead advisor was hismentor and former customer, Sol Trujillo, which smacks of cronyism, if you ask me. Chairman Masayoshi Son stepped in and put a stop to it. The stock has lost a third of its value since he hired Claure.
No. 6: Brian Kelley, CEO, Keurig Green Mountain
The K-Cup brewing company couldn’t have had a worse year. Already facing a saturated market, its Keurig 2.0 machine was plagued by scathing reviews and a major recall. Then the former Coca-Cola executive launched a new Kold brewing system that, at $300, was too expensive for mainstream adoption. The stock was one of the worst performers in the S&P 500 until JAB Holding Company bailed shareholders out with a $14 billion cash deal.
No. 5: John Mackey and Walter Robb, co-CEOs, Whole Foods
After pioneering the natural and organic foods market back in 1980 and masterfully scaling that concept into a nationwide chain of supermarkets, Whole Foods is now besieged on all sides by competitors and suffering from a negative brand image of being overpriced. Mackey and Robb have lost the recipe to satisfy customers. Shareholders too. The stock is trading near a five-year low. Time for a change, maybe.
No. 4: Eddie Lampert, Chairman and CEO, Sears Holdings
Some CEOs are such perennial train wrecks that nobody even bothers to talk about them anymore. Well, I just can’t let this one go. In a record three consecutive years on the list, the man who engineered the disastrous merger between Sears and Kmart continues to unravel not one but two formerly great American brands. The company is still shrinking, piling up record losses and disappointing investors. The stock is down 35% this year and trading near all-time lows.
No. 3: Marissa Mayer, CEO, Yahoo
Faced with a core Internet business that investors valued at less than zero, Yahoo made the only sane choice: spin off its enormous stake in Alibaba, allowing both entities to flourish. Except the IRS wouldn’t bless the tax-free transaction so, after two years of this “how to unlock shareholder value” nonsense, Yahoo did a 180 and is now planning a complex “reverse spin.” Translation: Verizon or TPG please buy this mess and put us out of our misery. Shares lost about a third of their value in 2015 and investors have lost complete confidence in Mayer’s three-year turnaround effort.
No. 2: Doug McMillon, CEO, Wal-Mart
The Dow’s worst performer in 2015, Wal-Mart is essentially getting crushed by Amazon, Costco, Target, ... pretty much everyone. As a value proposition for customers, low prices just ain’t what they used to be. Growth has stalled, profits are down and expenses are up. Not a great combination. And as I see it, McMillon’s plan to spend billions to compete with Amazon and other online retailers will only make matters worse.
No. 1: Meg Whitman, CEO, HP Enterprise and Chairman, HP Inc.
There’s a new definition of a successful turnaround, folks. Here’s what it looks like: Four straight years of revenue declines, nearly $20 billion in write-offs and a staggering 85,000 announced layoffs. Meg Whitman calls that a turnaround. I call it a bloodbath.
And with no avenues left to placate investors, Whitman fell back on the politically expedient tactic of splitting the company in two, thus ending the 76-year saga of a Silicon Valley icon that once stood for innovation. But it’s really just window dressing for Wall Street, in my opinion.
All the write-offs, layoffs and spin-offs in the world won’t fix HP’s core problem, that its businesses are undifferentiated relative to market leaders in enterprise services, personal computing and printers. That’s why the combined market cap of both companies is a paltry $47 billion, less than half of their combined annual revenues.
Meanwhile, by selling this bill of goods to stakeholders, the former eBay boss and candidate for Governor of California didn’t just get to keep her job, but somehow managed to end up with two jobs. She’s now chief executive of HP Enterprise and chairman of HP Inc. Now that’s quite an accomplishment.