Top 10 World's Worst CEOs

Its fashionable to ask for the heads of CEOs when things go wrong. Can one person be solely responsible when things go really wrong? If a company is caught up by external factors beyond their control, like the current crisis, one may be able to argue that they cannot really plan for such contingencies. The crux is when the CEO is the architect of the very policies and strategies that caused their companies to be mostly responsible for their mess, when the bust comes, they do so spectacularly. Some of the CEOs here literally were the poster boys and emblems for many of the financial crisis. Here are the top ten worst CEOs ever by Portfolio.com:

1. Dick Fuld

It’s one thing to oversee the collapse of one of Wall Street’s most esteemed firms. But when your hubris triggers a national financial panic as well, you’re a shoo-in for our top prize. Fuld’s reckless risk-taking may have been typical of Wall Street, but his refusal to acknowledge that his firm was in trouble—and take the steps necessary to save it—was beyond the pale. Since filing the largest bankruptcy in U.S. history ($613 billion in debts outstanding), Fuld has been belligerent and unrepentant. Even Bernie Madoff said he was sorry.

THE STAT: Fuld was recently spotted trying to figure out the Jet Blue check-in machines at La Guardia Airport.

2. Angelo Mozilo

Meet the man who made subprime a household word. Once a symbol of self-made accomplishment—a butcher’s son who built the largest mortgage lender in the country—Mozilo became blinded by success and began going after the riskiest and most unsavory of borrowers to boost his company’s market share. In so doing, he legitimized a sector that would ultimately bring down the economy.

THE STAT: Mozilo’s once-secret, now-infamous “Friends of Angelo” program provided loans on favorable terms to politically influential borrowers, including Senators Kent Conrad and Chris Dodd.

3. Ken Lay

When it comes to bad CEOs, Lay was the complete package: He was not only dishonest but disastrously inept as a manager as well. Lay, who founded Enron and turned it into a $70 billion energy company, was uninterested in the day-to-day tasks of running the business. Consequently, he gave free rein to untrustworthy subordinates like Jeff Skilling and Andy Fastow. He also signed off on a maze of convoluted transactions that formed the basis of a massive accounting fraud that would wipe out investors and bring down the corporation. Lay was convicted of securities fraud in 2006. If he hadn’t died soon afterward, he would have faced as many as 30 years in prison.

THE STAT: Enron stock lost 99.7 percent of its value in 2001.

4. Jimmy Cayne

Talk about an out-of-touch leader. Cayne was playing bridge when two Bear Stearns hedge funds collapsed in July 2007, and was again the following March when a liquidity crisis at the firm led to its emergency sale to J.P. Morgan. Never mind that its share price was $10 (less than 3 percent of its high of $170); Cayne will spend the rest of his days living down reports that one of his other favorite pursuits was smoking pot.

THE STAT: What a difference a year makes: A share price of $10 doesn’t sound too bad these days.

5. Bernie Ebbers
The ultimate corporate shopaholic, Ebbers bought an obscure telephone carrier in the 1980s and went on a 17-year acquisition binge that turned it into the world’s largest telecom company. Alas, his passion for deal­making didn’t translate into the savvy necessary for running the complex business. When telecom stocks went south in 2000, the company’s massive debt was exposed. Ebbers tried to disguise it through fraudulent accounting. In 2005—three years after WorldCom filed for bankruptcy—he was convicted of overseeing $11 billion worth of accounting fraud. He’s now serving a 25-year prison term.

THE STAT: When Ebbers resigned, in 2002, WorldCom stock had fallen to $1.79 from a peak of $64.50 in 1999.

6. Al Dunlap

Normally, when an overhyped honcho falls from grace, time must be spent digging up his most egregious public statements, revealing the swagger that preceded the downfall. “Chainsaw Al” Dunlap, in contrast, was just getting revved up when his career conked out and his reputation got shredded. Picked by the board of Scott Paper Co. as the man to turn the struggling company around, Dunlap earned his nickname by ­slicing 11,000 employees. When Scott merged with Kimberly-Clark, Dunlap’s payoff was estimated at more than $100 million. Unable to flip Sunbeam to a new buyer, as he’d done with Scott, Dunlap was stuck actually running the company. He failed spectacularly. Within two miserable years, the board fired him. The tactics he’d used to stave off losses—the company overstated its net income by $60 million, which was real money back then—earned him a civil suit from the SEC and a class-action suit by shareholders. Dunlap eventually settled both and was barred from serving as an officer or director of any public company. You could call Chainsaw Al’s story a fall from grace, but in his case, that’s probably not the proper word.

7. Fred Joseph

As Michael Milken’s boss, Joseph led Drexel to “it” firm status on Wall Street in the 1980s. He then oversaw its plunge into bankruptcy in 1990, after the company was convicted of insider trading and forced to pay $650 million in fines. There was no evidence that Joseph himself committed a crime, but his poor management left the company without a crisis plan. In 1992, Drexel defaulted on $100 million in loans and closed up shop. Unlike Milken, Joseph didn’t go to jail, but he was banished from being a Wall Street CEO for life.

THE STAT: Joseph has since become managing director of Morgan Joseph & Co. In 2007, an industry group named him investment banker of the year.

8. Jay Gould

When it comes to unscrupulous behavior, Gould makes Milken look like a sweetheart. A railroad developer and speculator, Gould sold out his associates, bribed legislators to get deals done, and even kidnapped a potential investor. He duped the U.S. Treasury, pushing up the price of gold and prompting a scare on Wall Street that depressed all stocks. After hiring strikebreakers during a railroad strike in 1886, he was reported to have said, “I can hire one half of the working class to kill the other half.”

THE STAT: When Gould died, his fortune was worth an estimated $67 billion in inflation-adjusted dollars.

9. John Patterson

The tyrannical Patterson liked to fire and then rehire executives to break their self-esteem. He banned “harmful” foods—including bread and butter—from company premises and had employees weighed and measured every six months. In 1913, he and 29 NCR officials were convicted of various antitrust violations, including the use of “knockout men” to intimidate store owners and keep them from buying from NCR’s competitors. (The conviction was overturned a year later.) Patterson may be best known for firing Thomas Watson, who went on to build IBM.

THE STAT: Today, NCR is worth $1.5 billion.

10. John Akers
While the rest of the world was moving toward personal computing, ­Akers remained stuck in the mainframe age, never quite figuring out what to do with IBM at a critical point in the tech industry’s evolution. Many outsiders viewed Akers as being in over his head. IBM was paralyzed by his lack of decisiveness.

THE STAT: Akers stepped down shortly after the company announced a $4.97 billion net loss for 1992.


p/s photo: Charlie Yeung & Gigi Leung