H-P revealed this week that accounting fraud was allegedly uncovered at a software company it acquired under Leo Apotheker’s tenure as CEO. Here is a look at 10 chief executives who didn’t fare real well in their roles leading their companies.
Former Hewlett-Packard (NYSE:HPQ) CEO Leo Apotheker spent less than two years at the helm of SAP (NYSE:SAP) before taking over the largest business software company in September 2010. H-P lost $30 billion in value and its stock dropped 40% during Apotheker’s tenure of nearly 11 months.
Despite the short stint as CEO, Apotheker received over $13 million in compensation. This week, on Nov. 20, H-P said the company took an $8.8 billion write-down in relation to its acquisition of British software company Autonomy, citing “serious accounting improprieties” discovered in an internal investigation. H-P bought Autonomy one month before its board of directors ousted Apotheker. In the same month, H-P announced plans to abandon its WebOS mobile operating system and sell its Touchpad tablet at a significant discount.
The former chief executive and chairman of Enron led the company from 1985 until his resignation in January 2002. Lay was convicted in 2006 of 10 counts of securities fraud and other charges for his role in the corruption that brought down the energy company. He died on July 5, 2006, while vacationing in Colorado just months before his sentencing.
Cayne was appointed Bear Stearns’ CEO in 1993 and chairman in 2001. In 2007, the company’s hedge funds were collapsing while Cayne, an avid bridge player, was playing in a card tournament. As Bear Stearns was on the verge of bankruptcy in March 2008, Cayne was at a bridge tournament in Detroit.
Sculley, convinced to leave Pepsi (NYSE:PEP), became CEO of Apple (NASDAQ:APPL) in 1983. He discovered in 1985 that Steve Jobs, who was at odds with Sculley, tried to have him ousted. Sculley went to the board of directors. Jobs was subsequently fired from his role as head of Apple’s Macintosh division, and he later resigned as chairman to start his own venture. Sculley was forced out as CEO in 1993 over his mismanagement of Apple’s product line.
Kozlowski was named CEO of Tyco in 1992, serving in the role until 2002 when a controversy over his compensation emerged. He was convicted in 2005 on charges related to his $81 million in unauthorized bonuses and an investment banking fee payment by Tyco of $20 million to former Tyco director Frank Walsh, among other misuses of company funds. Kozlowski is serving up to 25 years at the Mid-State Correctional Facility in Marcy, N.Y.
Former Goldman Sachs (NYSE:GS) chief executive and New Jersey governor Jon Corzine was named CEO of MF Global in March 2010. On Oct. 31, 2011, trading of MF Global shares was stopped, and the company announced it declared bankruptcy. MF Global allegedly used customer funds to make an outsized bet—under Corzine’s direction—on European sovereign debt. The loss of $1.6 billion from customer accounts drew the attention of federal regulators. Corzine resigned as CEO on Nov. 4, 2011, and appeared before a House committee a month later. A recent House report by Congressional Republicans put the blame for MF Global’s collapse on Corzine.
FOX Business Network’s Charlie Gasparino reported last September that MF Global’s CFO for North America, Christine Serwinski, told investigators that Corzine “was well aware of the use and possible misuse of customer funds during the firm’s final days.”
Seawell was a brigadier general in the U.S. Air Force before serving as senior vice president for operations at American Airlines and then president of Rolls-Royce Aero Engines. He was recruited by Pan American World Airways in 1971 and named chairman and CEO of the company the following year, remaining with Pan Am until his retirement in 1981.
During Seawell’s tenure, Pan Am engaged in bidding wars with rival airlines in an effort to expand. This acquisition strategy caused the company to incur heavy losses, and Pan Am declared bankruptcy in 1991 after already selling most of its non-core assets. Delta Air Lines (NYSE:DAL) purchased Pan Am’s remaining profitable assets. Pan Am continued to struggle after its restructuring, with Delta claiming losses of $3 million a day. It collapsed in December 1991.
After leaving General Electric (NYSE:GE) when Jeffrey Immelt won the race to succeed Jack Welch as CEO, Nardelli became chief executive of Home Depot (NYSE:HD) in 2000. He dramatically overhauled the company’s structure by eliminating its decentralized management structure and moved all supply orders to the Atlanta headquarters. While the chain’s sales and net earnings doubled, shares of Home Depot did not keep up with rival Lowe's stock, which doubled during Nardelli’s tenure at Home Depot. Nardelli was criticized for having the company use less full-time employees with trade experience in favor of part-time workers to cut costs. His $240 million compensation also added to criticism of his leadership. The board ousted him in January 2007.
Nardelli took with him a $210 million severance package. He found a new job in August 2007 as chairman and CEO of Chrysler, accepting an initial annual salary of $1. A few months earlier, in May 2007, private equity firm Cerberus Capital Management purchased an 80.1% stake in the car maker. Nardelli announced in March 2009 that Chrysler need another round of loans. A $750 million loan from the government that required executive compensation to be capped was turned down one month. Chrysler filed for bankruptcy on April 30, 2009, and Nardelli announced that he was leaving the company.
Ebbers became CEO of a fledgling Long Distance Discount Services in 1985, orchestrating acquisitions of telecommunications firms. The company changed its name to WorldCom in 1995. In 2005, Ebbers was sentenced to 25 years in prison after being convicted of fraud and conspiracy in relation to WorldCom’s false financial reporting. WorldCom changed its name to MCI—a reference to the 1997 merger of MCI Communications and WorldCom—before Verizon (NYSE:VZ) acquired the company in 2006.
Kallasvuo joined Nokia (NYSE:NOK) in 1980 as corporate counsel before moving up the company’s ranks. After stints as head of Nokia’s business operations in the U.S. and then COO, he was named president and CEO in 2006 before leaving in September 2010. The company was criticized for not foreseeing the industry’s move to smartphones, and Kallasvuo’s tenure was marred by Nokia’s decline as a mobile phone maker.
Here are some of the worst chief executives to run well-known companies.