1. Sears (NASDAQ: SHLD)
CEO: Edward Lampert
Year started: 2013
One year stock price change: -55.1%
Annual compensation: $5.7 million
Eddie Lampert was the architect behind the merger that created Sears Holding. In an $11 billion deal, Kmart took over Sears in 2005, forming the third largest retailer in the country. One of his goals was to sharply cut costs by combining overlapping operations of the two companies. Lampert’s hedge fund ELS Investments still controls Sears Holdings with a 53.2% position. After the company cycled through several CEOs, Lampert took the job himself in 2013. Sears reported $53.0 billion in revenue in 2007. By last year, revenue fell to $31.2 billion. The company, which lost money in each of the last four years, continues to shrink rapidly. In its last reported quarter, revenue fell to $5.8 billion from $7.2 billion in the same quarter of the previous year.
2. IBM (NYSE: IBM)
CEO: Virginia Rometty
Year started: 2012
One year stock price change: -18.9%
Annual compensation: $19.3 million
105-year old IBM is one of the greatest conglomerates in U.S. history. The company created some of the most important tech products of all time, including the mainframe computer and PC. The company has been battered by falling demand for large computers, a poor showing in the enterprise software and consulting business, and a weak move into the cloud computing market. IBM reported $103.6 billion in revenue in 2008. Revenue last year was $92.2 billion, and has continued to decline in 2015. Ginni Rometty has been CEO for four years. Rometty has repeatedly told shareholders the company will soon become dominant in cloud computing, mobile, and social media. Instead, it appears the company is having more trouble dealing with the changing tech landscape than Rometty is willing to admit.
3. Xerox (NYSE: XRX)
CEO: Ursula Burns
Year started: 2009
One year stock price change: -31.6%
Annual compensation: $22.2 million
Carl Icahn has finally managed to achieve what many Xerox investors were hoping would happen for a long time. Following pressure from the billionaire shareholder, the company announced it is breaking in two. This breakup is essentially undoing CEO Ursula Burns’ 2010 purchase of Affiliated Computer Systems for $6.4 billion. At the time, the plan was to transform Xerox from a hardware and copier company to an IT consulting company. Xerox’s performance has been downhill since. The company is in such deep trouble that the Icahn plan did not lift the company’s stock price. It trades near its 52-week low, which puts it down 32% for the period. Revenue of the company Burns created hit $22.6 billion in 2011. Last year, revenue was $18.0 billion, and it continues to drop rapidly. Burns may not have a role in either of the two new companies.