BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

The Worst CEO Screw-Ups Of 2014

This article is more than 9 years old.

Which CEOs made the most egregious errors in 2014? This year we’ve got quite a variety, from Eddie Lampert at struggling 121-year-old retailer Sears, to the ousted bosses at clothing sellers Abercrombie and American Apparel, to the CEO of embattled ride-hailing service Uber, to the former president of Portugal’s most well-known bank, who’s responsible for $10 billion in shareholder losses. We’re also including two salacious stories about CEOs who pled guilty to domestic abuse charges involving their girlfriends and were subsequently ousted from their posts. We had Lampert on the list last year and brought him back for an encore given this year’s fresh debacles.

We’re calling these the “worst” boss screw-ups but we use that term loosely. Personally, I thought Microsoft chief Satya Nadella’s October statement that women shouldn’t ask for raises, which he voiced at a Phoenix conference celebrating the accomplishments of women in computing, was a strong candidate. But I consulted with a half dozen of my Forbes colleagues and with four business school professors and a crisis communications pro and they convinced me that Nadella was doing a good job of running Microsoft and his comment was merely a gaffe, for which he apologized profusely.

All but two of these bosses have lost their jobs, though Dov Charney of American Apparel has hired a lawyer to try to get his back.

To put together the list I took the advice of Richard Levick, head of Washington, D.C. strategic communications firm LEVICK, Jeffrey Sonnenfeld, a professor at the Yale School of Management, Harry Kraemer, a former CEO of drugmaker Baxter International and a professor at the Kellogg School of Management in Chicago and Charlie Harary, a professor at Yeshiva University’s Syms School of Business and CEO of VC firm H3 & Co. Sydney Finkelstein, a professor at Dartmouth’s Tuck School of Business, also generously shared the research he’d done for his own annual list of worst bosses, which you can read here. Credit also goes to a Yahoo Finance story by Rick Newman, where we discovered the two stories of CEOs who got in trouble for getting violent with their girlfriends.

Here are our picks. Please let us know who we missed.

Eddie Lampert, Chairman and CEO, Sears Holdings

  • Billionaire hedge fund manager took Kmart out of bankruptcy in 2003, then acquired Sears for $11 billion and merged the companies in 2005 to create Sears Holdings. Though Sears was floundering he took over as CEO in February 2013.
  • After racking up losses of $3 billion in two years, Lampert, 52, is on our list for the second consecutive year because he’s failed to boost numbers, instead sinking into the black pit of doom that seems to be the fate of brick and mortar retailers who can’t manage an online strategy.
  • Failed to fix Sears’ balance sheet woes by spinning off Lands’ End, after already making Sears Hometown and Outlet Stores separate companies.
  • In a deal one analyst described as “shady,” in September, loaned cash-strapped Sears $400 million from ESL Investments, the hedge fund he controls. The loan values stores at a steep discount, just $16 million, as opposed to the $20 million to $50 million Sears has previous sold its stores. It’s also low given the $5 billion of real estate assets on Sears’ balance sheet.
  • “His ego says he can’t leave and cut his losses and move on,” says Tuck business school’s Sydney Finkelstein.

Michael Jeffries, former CEO, Abercrombie & Fitch

  • Having driven the company to great popularity among teen retailers, Jeffries, 70, presided over its sliding fortunes until he resigned as CEO in December after 11 straight quarters of declining same-store sales 
  • Continues to be dogged by comments he made in a 2006 Salon article where he said, “We want to market to cool, good-looking people. We don’t market to anyone other than that.” (Abercrombie started carrying plus sizes late last year)
  • He also reportedly enforced strict etiquette for his staffers including on the company’s Gulfstream jet where he distributed a 40-page manual that included a clean-shaven dress code of Abercrombie polo shirts, boxers, flip-flops and light Abercrombie cologne. The manual also designated where his dogs should sit.

Dov Charney, former CEO, American Apparel

  • Company is in the red, with some $300 million of losses since 2010. The board has accused Charney of tapping company funds for personal use.
  • Charney has been accused of sexually harassing employees, and reportedly helped arrange the nude pictures of a former staffer who had accused him of sexual harassment to be posted online.
  • His actions cost the company and helped send the stock down by half this year, to just 58 cents a share.
  • Behaved abusively to staffers. According to one lawsuit covered by Bloomberg, Charney literally rubbed dirt in the face of a Malibu store manager and berated him with expletives, at one point yelling, “Get your f-‍-‍-ing s-‍-‍- together, fag. Where is your f-‍-‍-ing creativity? Get some f-‍-‍-ing girls in bikinis to stand on PCH [Pacific Coast Highway] and have them wave a f-‍-‍-ing American flag.” Says Sonnenfeld, “Sigmund Freud would have a stroke trying to capture the degree of Charney’s grandiosity and narcissism.”
  • Has hired lawyer Patricia Glaser, who has represented celebrity clients like Paula Dean, to contest his ouster.

Travis Kalanik, CEO, Uber

  • In November a senior vice president at Uber, Emil Michael, reportedly said the San Francisco ride-hailing company should think about hiring a team to dig up dirt on its media critics, and to spread personal details about Sarah Lacy, the editor of the Silicon Valley website PandoDaily who has criticized the firm. (Michael has said he made the statements at a private dinner, off the record, out of frustration.) Though Kalanik denounced the remarks, he did not dismiss Michael, a grave error, says Richard Levick. “Fish usually stinks from the head,” he says. “This was a level of hubris that needs to be stopped.”
  • Uber stopped its service in New Delhi after a driver was arrested, accused of raping a woman in his car.
  • District attorneys in San Francisco and LA said the company falsely advertised top safety standards with background checks, yet Uber doesn’t do fingerprint scans of drivers.
  • Officials in Bangkok, Madrid and Portland, OR told Uber to stop operations over concerns the service wasn’t sticking to local regulations. In France, Uber reportedly promised to match riders with “hot chick” drivers. The French government has announced it would ban the low-cost “UberPop” service because Uber drivers don’t meet French licensing requirements. The list of problems goes on. “It’s a company that seems as though they’re still operating as a fraternity,” says Levick.

Ricardo Espírito Santo Salgado, former president, Banco Espírito Santo

  • Forced by his inability to pay escalating debts in the Salgado family’s many businesses, Salgado sold his EspíritoSanto bank for just 5% of its value. Less than a month later, in August, the bank, Portugal’s largest by listed assets, collapsed. The debacle left investors with $10 billion in losses
  • The bank collapse has shaken the economy’s tentative recovery and the Portuguese government has pumped $6.1 billion into the bank in a restructuring.
  • The Financial Times reported “a trail of secret offshore financing vehicles stretching from  Panama to Luxembourg which comprised a desperate attempt to prop up the ailing Espírito Santo empire before its collapse.” (Salgado has said he did nothing wrong.)

Louis Chenevert, former CEO, United Technologies

  • In November after six years at the helm, Chenevert abruptly stepped down. Two weeks before, on a trip to Asia, he made a side trip to check on the construction of his 110-foot yacht.
  • According to The Wall Street Journal, he was too caught up in his personal affairs and not focused enough on the details of running the company. He was often away from the office and difficult to reach. Managers at some units wanted him to handle decisions in person rather than on the phone.
  • His departure package is valued at $179 million according to a valuation for The Journal made by Mark Reilly of human resources consultants Verisight.
  • The company has recently had weak order growth and poor margins.

Mark Frissora, former CEO, Hertz

  • Left in September after billionaire activist investor Carl Icahn called for his resignation, saying Frissora’s leadership had produced a “lack of confidence” at the company.
  • Ovrersaw the acquisition of the Dollar Thrifty rental car chain, which hasn’t brought in new profits.
  • Frissora could walk away with a $14 million exit package.

Mikael Hed, outgoing CEO and cofounder, Rovio

  • Profits at the Finland-based game maker, creator of Angry Birds, fell by half in the last year and Hed “passed the hoodie,” in the company’s words, to Chief Commercial Officer Pekka Rantala in August. “He is a coder,” says Tuck’s Finkelstein of Hed. “He was in way over his head.”
  • Angry Birds has fallen out of the top 100 of free gaming apps.
  • Rovio’s expansion into animation, merchandising and publishing has failed to make up for the loss in Angry Birds revenue.
  • The company laid off 16% of its workforce.

Patrick C. Henry, former CEO, Entropic

  • Head of the $207 million (revenues) San Diego company that makes semiconductors for home entertainment systems, Henry reportedly attacked “Beverly Hills Nannies” reality TV personality Ari Bellamar, dragging her by the hair and throwing her against a wall. When she tried to call 911 he grabbed her phone and shattered it against a wall. The two met online.
  • In June a Utah judge found him guilty of assault, fined him $400 and sentenced him to 40 hours of community service
  • Facing losses, Entropic dismissed Henry in November.
  • After laying off 150 workers in June, it let another 200 employees go in November.

Gurbaksh Chahal, former CEO and chairman, Radium One

  • Head of the San Francisco advertising technology company Radium One was charged with 45 felony counts alleging he beat up his girlfriend.
  • Chahal has denied the charges, writing a blog post that said he was reacting after learning that his girlfriend had unprotected sex with other people for money, and that the two had a “normal argument.”
  • In April the felony counts were dismissed and Chahal pled guilty to misdemeanors. He was sentenced to three years of probation and a year of domestic-violence counseling
  • In April the board dismissed Chahal.