America’s Most Hated CEOs

September 7, 2016 by Evan Comen

Hated CEO
Source: Thinkstock
Two-thirds of all employees approve of their CEO, according to employee review forum Glassdoor. Not all CEOs are regarded so well, however.

To identify the most hated CEOs, 24/7 Wall St. compiled CEO ratings and employee satisfaction reviews from Glassdoor — this is not a Glassdoor commissioned report. Eddie Lampert, CEO of Sears Holdings, is the worst rated CEO. Louis Welch rounds out the list with fewer than one third of employees giving him a favorable review.

Companies with the most likeable CEOs share several common characteristics that companies with the least likable CEOs lack. For example, CEOs who also founded their companies tend to have higher approval ratings than CEOs who were appointed. Just two of the 10 CEOs with the lowest approval ratings also helped found their company.

Click here to see the 10 most hated CEOs.

Employees at companies with low CEO approval ratings cite dissatisfaction with other members of upper management as well. Senior management workers at these companies are frequently described as incompetent, difficult to communicate with, and compensated with unjustifiably large salaries.

According to the 2016 Glassdoor study, “What Makes a Great CEO?,” CEOs with higher compensations tend to have lower approval ratings. The typical CEO in 2014 earned 204 times the median salary of an employee at a S&P 500 company. Although rising CEO compensation is generally a result of improved financial performance, high CEO salaries do not always reflect the financial well-being of the company. At Motorola Solutions, for example, CEO Greg Brown was compensated $13.3 million in 2015, up 67% from the year before — even as the company’s profits fell from $1.3 billion to $613 million. Motorola Solutions employees commonly complain about low pay and the disparity in incomes between upper management and lower-level positions.

On the other hand, some CEOs have been criticized for focusing too much on profits and shareholders at the expense of the employees. For example, Heinz CEO Bernardo Hees has been credited with increased profits at the company, which were promised to shareholders after H.J. Heinz merged with Kraft Foods Group in July 2015. However, Hees may have accomplished this with mass layoffs, other cost-cutting measures, and changes in corporate culture. Many employees on Glassdoor cite the cost-cutting measures as the primary drawback to working at the company.

Some industries tend to have higher CEO approval ratings than others. The industries with the highest average CEO approval ratings are real estate, construction, and information technology. Meanwhile, the industry with the lowest average CEO approval ratings is retail. Of the 10 CEOs with the lowest approval ratings, four are the leaders of retail companies.

To identify the most hated CEOs, 24/7 Wall St. reviewed ratings of acting CEOs and employee satisfaction reviews on Glassdoor. Only companies with more than 1,000 reviews and 200 CEO ratings were considered. Financial data for publicly traded companies came from financial documents filed with the Security and Exchange Commission.

These are the 10 most hated CEOs.

LA Fitness Gym

10. Louis Welch
> CEO approval rating: 33%
> Company: LA Fitness
> Glassdoor company rating: 2.6 / 5.0
> Tenure as CEO: 31 years

Founded by current CEO Louis Welch in 1984, LA Fitness has since become the largest health club in the United States by revenue. Despite the company’s financial success, Welch is relatively unpopular among his employees. Only 33% of employees reviewing LA Fitness on Glassdoor reported they approve of Welch, one of the lowest approval ratings of any CEO. Low pay, long hours, and inadequate training are among the least favorable reviews from employees. In general, the corporate office seems to be out of touch, and many employees do not feel they are treated with respect. One Glassdoor reviewer warned upper management: “You are going to lose lots and lots of good people if you do not change your ways.”

Jane Elfers, CEO The Children's Place

9. Jane Elfers
> CEO approval rating: 31%
> Company: The Children’s Place
> Glassdoor company rating: 2.6 / 5.0
> Tenure as CEO: 7 years

Jane Elfers has been at the helm of The Children’s Place since January 2010. Since then, the company’s stock has soared by approximately 157%. While she may be making shareholders happy, her employees are another story. Only 31% of current and former employees who reviewed the company on Glassdoor said they approve of Elfers.

Negative employee reviews may be the result of massive layoffs. Elfers is in the midst of carrying out her plan to close roughly 200 underperforming stores between fiscals 2013 and 2017 in an effort to increase the company’s profit margin. Meanwhile, Elfers was compensated $9.8 million in 2015, up substantially from $7.4 million in 2014 and $6.8 million in 2013.

Bill Brown, CEO Harris

8. Bill Brown
> CEO approval rating: 30%
> Company: Harris Corporation
> Glassdoor company rating: 3.0 / 5.0
> Tenure as CEO: 5 years

William Brown, who has been at the helm of aerospace and defense contractor Harris for nearly five years, is one of the least liked CEOs of any major company. Many employee reviews attribute the declining morale and a burgeoning culture of distrust to Brown, speculating that his chief concerns — the company’s profits and shareholders — often come at the expense of employees.

By that measure he has been successful so far. Now trading at over $90 a share, Harris stock has gained by well over 150% in value from the time Brown took over in November 2011. Brown has managed to increase the value of his company in the eyes of shareholders. However, many current and former Harris employees allege that Brown is cutting costs by getting rid of more experienced and more expensive engineers in favor of younger engineers with less experience.

Paul Jones, CEO Payless Shoes

7. Paul Jones
> CEO approval rating: 30%
> Company: Payless ShoeSource
> Glassdoor company rating: 2.6 / 5.0
> Tenure as CEO: 4 years

A private company owned by two holding companies, Payless Shoesource employs some 25,000 people worldwide. CEO Paul Jones joined the company in 2012. Today, after roughly four years, he has made a name for himself as one of the least liked CEOs in the country. Only 30% of current and former employees approve of Jones on Glassdoor, a smaller share than all but six CEOs of major companies. Low pay, long hours, and unrealistic expectations are some of the most common reviews reported by dissatisfied employees.

Do Won Chang, CEO Forever 21

6. Do Won Chang
> CEO approval rating: 30%
> Company: Forever 21
> Glassdoor company rating: 2.5 / 5.0
> Tenure as CEO: 32 years

Since Do Won Chang founded Forever 21 in 1984, the company has been the subject of numerous controversies regarding the treatment of its employees. In 2012, five former employees filed a class action lawsuit against the company, claiming that they were routinely detained during lunch breaks and after their shifts without overtime pay so that managers could search their bags for stolen merchandise — part of the company’s former loss prevention policy.

More recently, Forever 21 cut to part-time the hours of a number of full-time employees. With a maximum workweek of 29.5 hours, newly part-time workers no longer qualify for health care under the Affordable Care Act, which ensures health care to employees who work more than 30 hours a week. Such cost-cutting measures likely did little to improve Chang’s low approval rating.

Gregory Q. Brown, CEO Motorola Solutions

5. Gregory Q. Brown
> CEO approval rating: 29%
> Company: Motorola Solutions
> Glassdoor company rating: 3.1 / 5.0
> Tenure as CEO: 9 years

Motorola Solutions CEO Greg Brown was compensated $13.3 million in 2015, up 67% from the year before — even as the company’s profits fell from $1.3 billion to $613 million. Meanwhile, many employees on Glassdoor complain about low pay and the disparity in incomes between upper management and lower level positions. Brown’s increased compensation was due to a long-term incentive plan tied to the company’s stock price, which Brown helped inflate through massive share buybacks. The buybacks helped raise the stock price even as profit fell as fewer shares on the market meant higher value per share.

Buybacks can hinder long-term growth as profits are not used for reinvestment in the company, but rather to increase shareholder value. Motorola Solution employees seem to feel the same. According to one review on Glassdoor, the senior management at Motorola Solutions is “only interested in shareholders, not employees or company growth.” Just 29% of employees on Glassdoor approve of Brown, one of the lowest approval ratings of any CEO.

Kevin Kennedy, CEO Avaya

4. Kevin Kennedy
> CEO approval rating: 28%
> Company: Avaya
> Glassdoor company rating: 2.7 / 5.0
> Tenure as CEO: 8 years

Lead by CEO Kevin Kennedy, Avaya provides products and services for business communications. Kennedy has a PhD in engineering and also serves President Barack Obama on the National Security Telecommunications Advisory Committee. Despite these credentials, he is not well-regarded by his employees.

Employees frequently complain of being squeezed by the company, often working long hours without the reward of an annual pay raise. One reviewer wrote, “No raises, promotions, or work-life balance.” Meanwhile, Kennedy’s total compensation went from $1.3 million in 2012 to $7.4 million in 2013, a 454% spike, more than any other chief executive in the tech industry that year.

Heinz Logo

3. Bernardo Hees
> CEO approval rating: 25%
> Company: Kraft Heinz Company
> Glassdoor company rating: 2.6 / 5.0
> Tenure as CEO: 1 year

H.J. Heinz merged with Kraft Foods Group in July 2015, forming the third largest food and beverage company in North America — The Kraft Heinz Company. Bernardo Hees, CEO of Heinz since 2013, stayed on as CEO of the combined company. For the 22,000 employees of Kraft who were placed under new management, Hees’s introduction as CEO was accompanied by mass layoffs, cost-cutting measures, and changes in corporate culture. Less than a month after the merger was completed, Kraft Heinz removed the free snacks from its Chicago headquarters, cut employee travel budgets, and banned employees from bringing its rival food products into the office. Many employees on Glassdoor cite cost-cutting measures as the primary drawback to working at the company.

John Fallon

2. John Fallon
> CEO approval rating: 24%
> Company: Pearson
> Glassdoor company rating: 2.8 / 5.0
> Tenure as CEO: 4 years

Education company Pearson provides products and services to schools, governments, and individuals in more than 70 countries. The company is over a century old and in recent years has attempted to transition into the age of the Internet. For example, in the summer of 2015, Pearson sold the The Financial Times and The Economist to Japan-based newspaper holding company Nikkei Inc. CEO John Fallon said the sale was an effort to consolidate and spur growth. While the results of the strategy remain to be seen, the large reorganization effort appears to be putting employees on edge.

U.S. politics has also contributed to Fallon’s unpopularity. Fallon’s critics from the left claim the company’s motives cannot include both profit and the company’s stated altruistic goals of improving educational outcomes. He is also criticized by the right for profiting from the federal education standards, which are widely opposed by many conservatives.

Edward S. Lampert, CEO Sears

1. Edward S. Lampert
> CEO approval rating: 20%(Sears) 22%(Kmart)
> Company: Sears Holdings Company
> Glassdoor company rating: 2.6 / 5.0
> Tenure as CEO: 3 years

Sears Holdings controls Sears and Kmart, two of the nation’s largest department stores. Edward Lampert, CEO of the holding company, is the most disliked CEO of any major company. Only 22% of Kmart employees and 20% of Sears employees approve of Lampert, according to reviews on Glassdoor. Many complaints center around layoffs and stagnant wages, likely attributable to falling sales. The company’s revenue has declined substantially in recent years, from $36.2 billion in its fiscal 2014 to $25.1 billion in fiscal 2016. Lampert is likely unpopular with company shareholders too. Over the past three years, under his watch, the company’s stock price plummeted by 70%.

Lampert has received a base salary of $1.00 in each of the past three years he has served as CEO. A nearly non-existent base salary appears to be a public relations stunt as his total annual compensation, including stock awards, has been at least $4 million since 2013, peaking at $5.7 million in fiscal 2014.