4. Zynga (NASDAQ: ZNGA)
CEO: Mark Pincus
Year started: 2007-2013, 2015
One year stock price change: -10.8%
Annual compensation: $33,308
Zynga was in trouble from its first day as a public company. Its 2011 IPO was priced at $10 per share. It closed its first day of trading lower, at $9.50 per share. Zynga was one of the hot social media company IPOs along with Facebook (NASDAQ: FB) and Twitter (NYSE: TWTR). Shortly after the IPO, Wall Street briefly warmed to Zynga’s position as a game provider first and foremost. The stock, however, is currently down 80% since the IPO. Co-founder Mark Pincus held two critical jobs at Zynga: chairman and CEO. Pincus relinquished the CEO job in July 2013, but took back the job in April 2015. Pincus’s largest problem is that Zynga has been a one-trick pony. Farmville was its only wildly successful game, and the company did not manage to replicate the success of Farmville with other titles. For a hot social media company, Zynga is dying. Revenue in the last reported quarter fell to $186 million from $196 million in the same period the year before.
5. Valeant Pharmaceuticals (NYSE: VRX)
CEO: J. Michael Pearson
Year started: 2008
One year stock price change: -51.6%
Annual compensation: $10.3 million
Long-time Valeant Pharmaceuticals International Inc CEO Michael Pearson is credited for turning the company around via a massive shopping spree — but he has been under fire recently. The company makes a number of major drugs that target areas such as weight loss, vitamin deficiency, and depression. While revenue has soared from $1.2 billion in 2010 to $8.3 billion last year due to the many acquisitions, the deals have also left the company with a heavy debt load. More seriously, Valeant has been in the hot seat over rocketing drug prices and due to its relationship with specialty mail order pharmacy company Philidor. Philidor has been accused of charging customers for higher-priced drugs rather than cheaper generics among other questionable practices. Valeant management already appeared in front of a congressional hearing together with the so-called “pharma-dude” Martin Shkreli. The controversy around Philidor also triggered allegations of accounting fraud. In January, the company announced it may restate past financial results due to improper revenue recognition practices with Philidor. Valeant shares are down 70% from their 2015 peak. Although Pearson has been on a medical leave of absence since December, it is time for the Valeant board to fire the long-time CEO.
6. Twitter/Square (NYSE: TWTR, NYSE: SQ)
CEO: Jack Dorsey
Year started: 2006-2008, 2015/2009
One year stock price change: -63,4%, -24.5%
Annual compensation: N/A, N/A
The time has come for Jack Dorsey — who holds two public company CEO jobs — to do the right thing. Dorsey is Square’s co-founder, chairman, president and CEO. He also took the job of managing the deeply troubled Twitter in July. It has become obvious that Twitter is going to be the much more demanding job. Both stocks have slid lower since Dorsey re-joined Twitter. Twitter’s shares plunged 63% in the last year, and Square’s dropped 24%. Moving out of the Square CEO job is the appropropriate decision because no one can run two deeply troubled companies — and Twitter is the more desperate of the two. By the time Dorsey is pressured to vacate his role as CEO of Square, it may be too late as many of the growth opportunities for Twitter will have passed. Twitter’s user-based growth has stalled, and many advertisers do not consider it a valuable marketing tool. Square, a mobile processing company, has more immediate prospects, as indicated by Visa’s investment. Dorsey has yet to do harm and he can still do good, but only at one company — and his talents would better serve Twitter.
7. SunEdison (NYSE: SUNE)
CEO: Ahmad Chatila
Year started: 2009
One year stock price change: -94.5%
Annual compensation: $7.7 million
Ahmad Chatila has been president and CEO of renewable energy company SunEdison (SUNE) since March 2009. Spinoffs and company restructuring have created some controversy, and the company is apparently very low on cash. An effort to raise capital in January resulted in the company’s stock becoming severely diluted. The company’s shares are down 95% from its 52-week high. As liquidity and business model concerns persist, the big question now is whether SunEdison can still make it — even with a new leader. With David Einhorn’s hedge fund Greenlight Capital winning a board seat and several senior officials already forced out, Chatila may begin to feel the pressure from the board. A 95% share price drop is often enough of a bad mark for any CEO. That the company is also closing plants in Malaysia and Texas are just more red flags.
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