8. American Express (NYSE: AXP)
CEO: Kenneth Chenault
Year started: 2001
One year stock price change: -31.6%
Annual compensation: $22.8 million
Kenneth Chenault has been chairman and CEO of American Express (AXP) since 2001. It is worth noting that he has made some good decisions for the company in the past. The company’s stock price, however, has been on the decline in recent months. The company has spun off several units over the years, and for the most part, this has hurt AmEx. The stock closed 2015 at $69.55 — down 26% for the year, and analysts expect another decline in 2016. Among the events that have damaged Amex the most is the loss of its position as exclusive credit card for Costco. Amex also recently lost its branded card deal with Fidelity. Recently, AmEx announced a management reorganization with an unknown number of job cuts, as well as a $1 billion target in cost cuts over the next two years. The company’s problems are exacerbated by the fact that many retailers do not use AmEx. With the rise of Visa, Mastercard, PayPal, Apple Pay and a myriad of other forms of competition in card processing and card issuance, the time for a new transformational CEO for the digital age has arrived. With Chenault turning 65 this year, it is time to hand the baton over and let a new CEO move the company beyond its present problems.
9. Staples (NASDAQ: SPLS)
CEO: Ronald Sargent
Year started: 2002
One year stock price change: -45.3%
Annual compensation: $12.4 million
In a world moving fast beyond traditional offices, office retailers have been hurting. But Staples CEO Ronald Sargent’s proposed merger with Office Depot, rather than offer a lifeline to the beleaguered chain has become a burden and may set the company’s normal operations back indefinitely. To avoid being labeled a monopoly and earn government approval for the transaction, Staples may have to give up some of its critical operations. The cost of such a severe restructuring may well be too high for shareholders. It now seems that the right move would have been to acquire OfficeMax or Office Depot before those two merged in 2013, when the FTC and Department of Justice were less likely to intervene. Sargent has been CEO of Staples since 2002. He led the several billion dollar Corporate Express buyout in 2008. Sargent might opt to, or be forced to, remain chairman and allocate the CEO role to someone else. Whether Staples wins approval of the Office Depot deal or not, a lot of time and effort has been expended — and the risky work of integration has yet to begin.
10. Bed Bath & Beyond (NASDAQ: BBBY)
CEO: Steven Temares
Year started: 2003
One year stock price change: -37.1%
Annual compensation: $19.1 million
Now that its growth has slowed, Bed Bath & Beyond (BBBY) needs help immediately. Steven Temares has been CEO since 2003. He seems to have the backing of the two co-chairmen and co-founders, Leonard Feinstein and Warren Eisenberg, and he may very well be protected from outside pressure. Bed, Bath & Beyond needs to thwart competition from Amazon, Wal-Mart and other in-store and online retailers. It needs to revitalize its brand and its store design, as margins continue to drop and sales have stalled. Temares has been part of the company’s leadership almost throughout its entire history as a public company. It seems logical and practical for Temares to stay on as a board member, but something big needs to happen here.