The Best and Worst CEOs of 2018
In August 2018, 154 chief executives at American companies left their job — the most of any month on record, according to management consulting firm Challenger, Gray, & Christmas. While many departed on good terms, leaving for another company or retiring, others stepped down amid scandals or were forced out by their board of directors on a no-confidence vote. The record-high CEO turnover rate is partially a reflection of the pressures that come with the top job: in good times and bad, the buck often stops at the CEO.
The specific responsibilities of a CEO vary from company to company. Still, as the highest-ranking managers, the decisions CEOs make can have serious consequences, affecting the lives of thousands of employees, investors, and even consumers.
This year, there were many high-profile chief executives who stood out. Many of them, like Amazon’s Jeff Bezos or Dollar General’s Todd Vasos, took their companies to new heights, often bucking market trends.
In other cases, CEOs were in the spotlight for poor leadership, ethically questionable business decisions, or morally ambiguous, sometimes reprehensible, personal actions. Often, these mistakes resulted in sales declines, share price drops, and even bankruptcy.
24/7 Wall St. reviewed a number of measures related to corporate performance in addition to media reports to identify America’s biggest CEO winners and losers of 2018. We only considered CEOs of highly visible companies.
1. Steve Ells
> Company: Chipotle Mexican Grill
> Tenure: July 2003 – Mar. 2018
> Annual compensation: $11.1 million
> YTD stock price change: +62.4% (NYSE: CMG)
The founder of fast casual restaurant Chipotle Mexican Grill, Steve Ells took an $85,000 loan to open the first restaurant in Denver, expanding it to a nationwide chain with 2,400 locations. Earlier this year, however, Ells stepped down as the company’s chief executive. The company has faced widespread criticism in the wake of E-coli outbreaks traced back to several Chipotle locations in late 2015. Company leadership said they would investigate the issue and make necessary changes, but problems persisted. Additionally, after much anticipation, the company introduced queso to its menu, but the new ingredient did not take off as expected. Chipotle’s sales dipped 13% in 2016 and have yet to return to 2015 levels.
After Ells departure was announced in November 2017, Chipotle stock surged 12%. Ells handed the company over to former Taco Bell CEO Brian Niccol in March of this year.
2. John Flannery
> Company: General Electric
> Tenure: Aug. 2017 – Oct. 2018
> Annual compensation: $5.8 million
> YTD stock price change: -57.5% (NYSE: GE)
GE share price rose more than 7% after John Flannery was removed as CEO in October. Before he was ousted, company shares were their lowest point in nine years. Reportedly, Flannery was ousted because he did not facilitate GE’s turnaround quickly enough, though Jim Cramer speculated that it had more to do with Flannery’s failure to anticipate the high costs of running the company’s energy and insurance businesses.
GE’s board did act quickly, though. Flannery was ousted after just 14 months at the helm. Additionally, he may leave with far less compensation than many CEOs get on their way out, as GE’s board has considerable flexibility in determining severance.
3. Carlos Ghosn
> Company: Renault-Nissan-Mitsubishi Alliance
> Tenure: 2001 – present
> Annual compensation: N/A
> YTD stock price change: N/A
Carlos Ghosn, CEO of the Renault-Nissan-Mitsubishi Alliance, one of the largest automotive groups in the world, is currently sitting in a Tokyo jail cell. Ghosn made a name for himself in the 1990s by bringing Japanese automaker Nissan back from the brink of bankruptcy. Though he has not been officially charged, he is being held as a flight risk under suspicion that he underreported his income by tens of millions for dollars over the years since 2010. Though Ghosn denies any wrongdoing, his has been removed from his position as chairman of Nissan.
4. Edward Lampert
> Company: Sears
> Tenure: May 2013 – Oct. 2018
> Annual compensation: $4.3 million
> YTD stock price change: -90.3% (NASDAQ: SHLD)
After buying Sears in 2005, many saw Eddie Lampert as the department store chain’s savior. But by now it is apparent Sears is likely a dying brand, having filed for bankruptcy in October. In an attempt to save Sears, Lampert and his own hedge fund made loans to the company. Though Lampert and his company are the owner of much of Sears’ debt and assets, they could benefit from the company’s collapse as much of the debt is backed by hard assets. And though Lampert is also the company’s largest shareholder, he has also bought over the years much of its valuable stores and real estate. Critics have called Lampert’s strategy with Sears a “slow-motion liquidation,” stripping the company’s assets and laying off tens of thousands of workers. Even if Lampert remains financially secure, his name will forever be associated with the death of a well-known brand.
5. Les Moonves
> Company: CBS Corporation
> Tenure: Apr. 2003 – Sept. 2018
> Annual compensation: $69.3 million
> YTD stock price change: -11.9% (NYSE: CBS)
Les Moonves served as chairman and CEO of CBS Corporation from April 2003 to September 2018, when he resigned amidst allegations of sexual misconduct. The allegations, which include accusations from multiple women going as far back as the 1980s and descriptions of abuse from CBS employees, first came to light in a New Yorker profile in July 2018. While Moonves denies the claims, text message correspondences between him and a Hollywood talent manager detailing attempts to find acting work for one of his accusers were reviewed and published in summary by the New York Times in November 2018. The text evidence may threaten Moonves’ $120 million exit package from CBS, which, according to his contract, is voided if the ex-CEO tried to pay off an accuser with job offers.