6 bosses who should be ashamed
These chiefs have damaged their companies with their scandalous behavior.
A number of top chiefs have been busted lately for doing things they should be ashamed of. One was declared by a government committee to be unfit to lead. One resigned after a questionable relationship with a female employee. Another lied on his resume.
In each case, the executive hurt the credibility of his company and damaged employee morale. Boards are left scrambling to recover. And investors are reeling, worried about the future of stocks they've put their faith in.
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Here, in all their gory glory, are six CEOs who should know better.
Yahoo's (YHOO) CEO has said for years that he has degrees in computer science and accounting from Stonehill College in Easton, Mass. But one tenacious shareholder did some research and found out that wasn't true.
The shareholder was Daniel Loeb of the Third Point hedge fund, which owns 5.8% of Yahoo shares. After Loeb announced his findings to the media, Yahoo confirmed an "inadvertent error" in Thompson's resume. Thompson did not actually hold a computer science degree.
Thompson is still the CEO at Yahoo, but the company's board finds itself under increasing pressure as Loeb turns the screws. Loeb has repeatedly called for Thompson's resignation. "It seems farcical to us that the board will most likely spend more time deliberating over whether Mr. Thompson should be fired than it did properly vetting whether he should have been hired," Loeb wrote in a new letter to the board Wednesday.
Stiller has had a terrible week. It doesn't get much worse than this, in fact. The founder and former CEO of Green Mountain Coffee Roasters (GMCR) was caught making risky bets, borrowing from a brokerage and using his holdings of Green Mountain as collateral.
That's fine when the stock is doing well, but Green Mountain shares have dropped 41% this year. The value of Stiller's holdings plunged to the point that his broker, Deutsche Bank, decided to issue a margin call. Stiller had to either add more cash to his account or sell some securities. He chose the latter, selling 5 million Green Mountain shares worth $125.5 million.
But Green Mountain has specific windows for such transactions, and Stiller's sale was outside of those windows. Bad move. Green Mountain booted him from the position of board chairman. It looks like Stiller still needed cash, because he also sold all of his 8 million shares in Krispy Kreme (KKD) for $6.15 each, Forbes reports. That was another ill-timed move, as Krispy Kreme shares were nearly $10 less than a year ago. He had been a major shareholder, with roughly a 12% stake.
The CEO of Best Buy (BBY) resigned in April amid questions about his personal conduct. The company is now reportedly investigating whether Dunn improperly used corporate assets while in a relationship with a female subordinate -- a 29-year-old who worked in leadership training at Best Buy headquarters. Dunn is 51 and married.
Dunn was in the middle of overhauling the struggling electronics giant, pushing Best Buy away from the big-box model that it had made its name on. The company lost $1.7 billion in the quarter ended March 3 and said it would close 50 big-box stores this year.
But there is one bright light for Dunn at the end of this tunnel: He may be eligible for a severance package of $3.35 million, Bloomberg reports.
You've hit some kind of low when the government says you're unfit to lead a major company. That's what happened to News Corp (NWS) CEO Murdoch last week when a British parliamentary committee scolded him for the illegal phone hacking that caused a furor in the U.K.
The report cited major failures in corporate governance and cast a skeptical eye on the leadership abilities of Murdoch and his 39-year-old son James.
One of Murdoch's tabloid newspapers, News of the World, hacked into the cellphone of a murdered teenage girl, leading to numerous criminal investigations into the company and several arrests.
How much Murdoch knew about the hacking is unclear. But the parliamentary report criticized Murdoch for covering up the behavior once he learned about it and not getting to the bottom of the problem. "These people corrupted our country," one UK lawmaker said.
The CEO of Groupon (GRPN) joked about drinking too much beer after his voice broke in a recent town-hall meeting with employees, The Wall Street Journal reported. Mason had been drinking beer on the clock -- employees are apparently allowed to do that at Groupon's town halls.
Mason drew harsh criticism after the beer episode. Should he be swigging beer while essentially telling employees that the company needed to grow up? Groupon has had a tough time since going public last year. It restated earnings for its fourth quarter and full year. It missed on earnings in its most recent quarter. Its stock price has steadily plunged to half of its IPO price.
Investors are clearly worried about Groupon and its 31-year-old CEO. It's time for Mason to run the company like a grownup. Keep the partying to a minimum and put a more professional sheen on Groupon's executive offices.
There's some funny business going on between McClendon's personal finances and those of his company, Chesapeake Energy (CHK).
Even as CEO, McClendon still found time to run a $200 million hedge fund that traded in energy commodities, Reuters reports. A CEO should not be personally trading around the same sectors his company is involved with, experts said. He also borrowed more than $1 billion, and for collateral used his stakes in Chesapeake's oil and natural gas wells.
Even worse: He got those loans from a company at the same time Chesapeake was negotiating to sell the same company hundreds of millions of dollars in corporate assets, The Wall Street Journal reports. Over the years, the Journal notes, the banks that loaned McClendon big money often won lucrative contracts with Chesapeake.
The tawdriness just goes on and on. Check out this Reuters special investigative report for more. The board stripped McClendon of his board chairmanship last month, but he remains the CEO.
CEOs stay in leadership roles
What's amazing is that most of these CEOs are still in leadership positions at their companies. Are investors really OK with this behavior?
In reality, booting a CEO is a messy process that takes time and considerable shareholder discontent. A board loathes controversy and often acts against a CEO only when pressed, either by shareholder sentiment or a public scandal.
Individual shareholders are often powerless to force change at a company, since they own so little of a stake. Institutional shareholders have much more power, but they don't want a change in leadership to cut the value of their holdings.
The structure gives CEOs plenty of leeway for questionable behavior.
Shouldn't they be held in the same standard as every other employee, with any company. If I lied on my resume', I would loose my job. If I were cheating on my husband with another employee & got caught, I would be reprimanded or fired as the other employee could bring a sexual harassment suit against the company.
Why are these employees (CEO's, chairman of the board, VP's or whatever) be any different?
A criminal culture is now running / ruining our once great country! Why should these egotistical CEOs feel that they have any limits!!! We live in a world of a Completely corrupted Congress!!! Crony Capitalizm is rampant! Want a Congressmen.. sure no problem.. Just pay in cash for your payoff... Oh I mean campaign contribution.
The bigger incompetent SOB that you are gives you the ability to be qualified to run our country into the ground. The criminals that we call Congress are the finest example of a big pile of... hot air!!
Somebody needs to least the criminal elite in!!!! even the big boys will be burned when this corrupt systems come crashing down, It will be the greed 1% that take themselves out. it will be the 99% that end up paying the price again! When will the corruption end!!! Publicly financed elections are our only hope! It limits the ability of Congress to steal in smaller increments.
It's somewhat amazing that a company such as Yahoo with all resources available would hire for the top position without clean background check. Background checks should be common business process for all trusted employees and standards should increase as level of responsibility increase. This is public company with clear responsibilities to report and disclose, so one must ask how can Yahoo properly disclose with a liar at helm. And to think that Wall Street and large companies are being managed by, "smart guys". Just Joking! I wonder what would happen if we allow the not too bright folk to run the companies that controls our 401 retirement plans, OK that's exactly the case here. This guy should be fired without his retirement plan. That will show him That Yahoo can be even a bigger liar in taking back what was promised.
The criminal mindset of the "executive" class is now the rule, rather than the exception. Fraud is so commonplace in daily life and commerce that it seems almost quaint, at this point, to try to litigate against it. The more you know about any of these people; the less you want anything to do with them. I have empathy for decent young people coming up in the world now. How are they to succeed in a culture like this? I think the best thing they can do is try to "build a better mousetrap"
The institutional systems in this country have been crushed by the powerful and unyielding wave of oligarchy sweeping the world. God help the people.
People; stick together.
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