The Worst CEOs of 2016
Many factors influence a company’s performance — some within the control of corporate leadership and some outside of it. If things go south, no matter the cause, corporate leaders are often the ones to take the heat.
In 2016, several CEOs did not perform well for their companies. Top manage ment is expected to have impeccable knowledge of the industry and its customers. To manage the risks of doing business, CEOs must make strategic decisions to steer the company in the right direction. For these reasons, investors watch CEOs very closely. While firing a CEO can itself result in a share price drop, there often is no other choice.
24/7 Wall St. reviewed scandals, firings, corporate restructurings, recent financial history, and other performance metrics associated with CEOs of major U.S. public corporations.
Some of the largest CEO missteps occurred in companies that until that point were quite successful. For example, at Wells Fargo, which has been highly profitable for years, federal regulators revealed thousands of employees at the bank had created over several years millions of unauthorized bank and credit card accounts to pad earnings. Former CEO John Stumpf stepped down as a result of the scandal.
Similarly, prior to Valeant’s epic stock price collapse earlier this year, the drugmaker’s revenue tripled in three years. Its share price went from under $60 in 2012 to over $250 in July 2015. Similarly, Chipotle Mexican Grill was one of the most successful fast food chains in recent memory. Its share price surged from around $250 in 2012 to nearly $750 in August 2015. However, in the wake of the restaurant’s food safety crisis and a related federal criminal investigation in early 2016, sales declined and the company’s share price plummeted. Chipotle co-CEO Monty Moran has since stepped down.
Not all CEOs are handed the reins of a successful company in a flourishing industry. When an executive is brought into an organization that has struggled for years to make a profit, he or she is expected to innovate, expand into growth opportunities, and cut back on operations that are no longer profitable. Several CEOs on this list inherited difficult roles but did nothing with their opportunity. Barnes & Noble CEO Ronald Boire was brought on to stem the bleeding at the struggling bookstore. While Boire tried to expand B&N’s repertoire, he found little success and left within a year.
To determine the worst CEOs of 2016, 24/7 Wall St reviewed CEOs or former CEOs who led major companies at some point during the year. The CEOs that made our list headed their companies while corporate financials or shares declined, or put their companies in serious jeopardy by allowing or engaging in illicit activities. Financial data for each company was obtained from the most recent financial documents filed with the federal government.
These are the worst CEOs of 2016.