Shareholders put their trust in the chief executive officer to direct the company to better fortunes. At some point, however, a CEO can do more harm than good. The telltale signs the CEO may be at that point are declining profits and falling stock prices. Every year, 24/7 Wall St. editors review a set of publicly traded corporations to identify the CEOs who should leave their companies — via retirement, firing, or shifting to non-operational roles inside their company.
24/7 Wall St. considered two groups: S&P 500 companies and post-2010 high-tech IPOs with valuations of at least $1 billion. In the first category, a CEO had to hold office for at least three years to to be considered. In the second, the CEO had to be in his or her job for two years.
Some groups of companies were completely excluded because the industries they are in have weakened significantly due to outside forces. The most obvious are energy sector companies. We also excluded companies that have completed major mergers, acquisitions or divestitures in the last year. Hewlett Packard, which split into two companies last November, is among this group.
We examined stock performance over one, two, and five years. CEO compensation was based on a three-year number as of the last proxy.
Finally, the editors used some judgement beyond raw data. CEOs who have repeatedly failed to successfully execute their own primary strategies made this list — even if shares in another S&P 500 or post-2010 IPO company dropped more.