Nine CEOs Who Need To Be Fired In 2010: 24/7 Wall Street

By 24/7 Wall Street: Public companies dismiss CEOs all the time. The firings can be due to incompetence, malfeasance, or tensions with boards of directors or founders. 24/7 Wall St. has chosen nine sitting CEOs who should be let go by their boards.

All the CEOs are on this list for simple reasons. The first is that many have presided over ethical or legal lapses. This is certainly an issue at Goldman Sachs, Dell, and Moody's. It is easy for observers to say that the chief executive of a large firm cannot be responsible for every action of every employee. But when the trouble is repeated and widespread, it is senior management that must be blamed for refusing to set a strong moral tone.

Some candidates are on this list is because they have made strategic decisions that have cost their companies dearly. Sprint-Nextel has decided to adopt a 4G format that is different from the one that AT&T and Verizon Wireless will use. In coming to the market first, it hopes to steal subscribers from its two larger rivals. Unfortunately for Sprint, both AT&T and Verizon have very strong products and competitive pricing to keep their customers where they are. Sprint probably painted itself into a box - a box in which its technology is unsustainably in the minority.

The last reason that a CEO may have been chosen is a simple one: the exceedingly poor management of a large and previously highly successful business. The best example of this is Boeing. It has been one of the world's premier manufacturing companies. The failure to deliver its flagship product on time has hurt the firm, as it has repeatedly put off the launch of the 787 Dreamliner.

What follows is a list of the CEOs and the case against them remaining in their current positions. Each of these companies would be much better off with a new leader - customers, shareholders, and employees should expect that they will get them.

(Also, check 24/7 Wall St.'s 15 Worst CEOs in History, including Thomas Edison, Enron's Ken Lay and Countrywide's Angelo Mozilo. And visit 24/7 Wall Street for more information.)

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Goldman Sachs Group, Inc. -- Lloyd Blankfein

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When He Started: June, 2005 Lloyd Blankfein became CEO of Goldman Sachs Group, Inc. (NYSE: GS) May 1, 2006. He earned $53.4 million that year and $54 the year after. Under Blankfein Goldman produced massive profits and the company’s stock went from a $165 when he became CEO to $234 on October 8, 2007. During that period, Goldman Sachs was considered the premiere investment bank in the world. Like the industry, Goldman suffered from the credit crisis in late 2008, and its stock price fell below $55. However, in September 2008 Warren Buffett invested $5 billion in the company, despite the turbulent period, reflecting perception of the bank’s inherent financial strength. Goldman also took $10 billion in TARP funds, but returned the money to the government in less than a year later. The most powerful and the only necessary criticism of Blankfein is the abundance of evidence that the company committed a number of unethical acts during the credit crisis. Recently, the SEC charged Goldman Sachs with fraud in structuring and marketing of certain securities tied to subprime mortgage collateralized debt obligations. According to the allegations, Goldman failed to disclose to buyers of the securities the role that a major hedge fund played in creating the securities and that the hedge fund had taken a short position against them. Goldman Sachs settled the charges for $550 million, but the SEC is looking at other CDOs sold by Goldman. When it announced the settlement the SEC said “We are looking at deals across a wide variety of products and institutions and that will continue.” A large number of Goldman Sachs shareholders and some of its customers have demanded that Blankfein step down. They argue, quite persuasively, that Blankfein perpetuated a culture that focused on profits, putting the interests of the company above the interest of its customers. The allegations have pushed Goldman’s stock from $185 on April 14 to $141 this week, cutting the company’s market cap by $25 billion. It remains to be seen whether the government will bring additional charges against Goldman and how many customers will flee the firm. It will never be known how many potential customers will opt not to do business with the company at all. The most blue chip firm on Wall Street for decades is now black. -- 24/7 Wall Street

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When He Started: June, 2005

Lloyd Blankfein became CEO of Goldman Sachs Group, Inc. (NYSE: GS) May 1, 2006. He earned $53.4 million that year and $54 the year after. Under Blankfein Goldman produced massive profits and the company’s stock went from a $165 when he became CEO to $234 on October 8, 2007. During that period, Goldman Sachs was considered the premiere investment bank in the world.

Like the industry, Goldman suffered from the credit crisis in late 2008, and its stock price fell below $55. However, in September 2008 Warren Buffett invested $5 billion in the company, despite the turbulent period, reflecting perception of the bank’s inherent financial strength. Goldman also took $10 billion in TARP funds, but returned the money to the government in less than a year later.

The most powerful and the only necessary criticism of Blankfein is the abundance of evidence that the company committed a number of unethical acts during the credit crisis. Recently, the SEC charged Goldman Sachs with fraud in structuring and marketing of certain securities tied to subprime mortgage collateralized debt obligations. According to the allegations, Goldman failed to disclose to buyers of the securities the role that a major hedge fund played in creating the securities and that the hedge fund had taken a short position against them. Goldman Sachs settled the charges for $550 million, but the SEC is looking at other CDOs sold by Goldman. When it announced the settlement the SEC said “We are looking at deals across a wide variety of products and institutions and that will continue.”

A large number of Goldman Sachs shareholders and some of its customers have demanded that Blankfein step down. They argue, quite persuasively, that Blankfein perpetuated a culture that focused on profits, putting the interests of the company above the interest of its customers.

The allegations have pushed Goldman’s stock from $185 on April 14 to $141 this week, cutting the company’s market cap by $25 billion. It remains to be seen whether the government will bring additional charges against Goldman and how many customers will flee the firm. It will never be known how many potential customers will opt not to do business with the company at all.

The most blue chip firm on Wall Street for decades is now black.

-- 24/7 Wall Street

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9 CEOs Who Should Be Fired In 2010

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Comments

[tribilin219]

08:49 AM on 08/06/2010

Let's keep them around till we can put them in jail!

[weirwolf]

03:15 PM on 07/19/2010

Akio Toyoda should NOT be fired!

[John Horner]

10:38 AM on 07/19/2010

WalMart's relative lack of success online is due to multiple factors, one of which is the weird way the tax laws are set up to penalize a company which has physical locations in every state. For example, a California customer buying from walmart.com pays sales tax, but that same buyer ordering from Amazon.com doesn't pay sales tax.

Also, why order from WalMart online when you drive past one every day? If you really want something from WalMart, it is easy to walk in and buy it.

Finally, WalMart's core customers are not in the heart of the internet buyer demographic. You can't pay cash online.

[land2341]

09:44 AM on 07/19/2010

I was sure they would list Bill Kleese of Valero Energy. Bad decision after bad decision has taken the company to the brink.

[The Catalyst]

02:11 PM on 07/18/2010

Meet Joseph Bozich - a new breed of CEOs or should I say rather a chip of the old block - way before CEO's got into the telegenic era of charisma!

“There are consumers who really care and will buy this apparel at a premium price,” says Joseph Bozich, “and then there are those who say they care, but then just want value. We’re hoping to prove that doing good can be good business, that they’re not mutually exclusive!”

What do you value? What kind of values do you want to support as individuals?... I personally would rather live with a lot less and support the businesses that are built on good values than those built on simply making a quick buck.

[MetrointheWoods]

01:43 PM on 07/18/2010

Notice how Blankfein just has these two bulging muscles on either side of his bald head that come down to his eyes? Is it just me, or does it look like horns or something should emerge?

[josephebacon]

12:48 PM on 07/18/2010

They're not the only clowns who need to be fired, but they're typical MBA's--they'll screw up the company, get a golden parachute and then get picked up by another company to continue doing the same thing, get another golden parachute and repeat...

[lazercat2008]

11:22 PM on 07/17/2010

I want to see 9 CEOs that deserve the death penalty.

[Bluemax1]

06:28 PM on 07/17/2010

Logic = Fire the CEO's who disregarded ETHICS.

The CEO's who engaged in illegal activity = JAIL

[vippy]

03:03 PM on 07/17/2010

...right along with every second senator. In this day and time we just can't afford them and why should they not feel the crunch?

[Agent672]

11:30 AM on 07/17/2010

a couple of those should be fired, then jailed.

[cambo]

08:22 AM on 07/17/2010

If someone is making 50 million a year and a company is profting X billion then we as consumers are paying to much to these cartels. Nobody should get that kind of money and gov should control pricing more so more money can stay in the pocket of the little person who struggles month to month to make ends meet and has to bail out the ones that get into trouble.

[Morgantheaxe]

03:39 AM on 07/17/2010

Dell has horrible horrible horrible culture problems. They ride their employees like worthless throw away horses. They encourage their sales staff to be extremely pushy. The idea that the company doesnt care about me and I do my job or they kick me down the road has really really hurt this company. Imagine how someone in that position feels about a customer? Dell lost its greatness because they put in place a cost cutting ceo that said we can do it cheaper overseas...all of it. They wiped out a great workforce, and now they are reaping what they sowed. I wonder if there is a name for this in business class yet? Destruction theory is already taken. So many companys have made this same mistake. They say to themselves, "Wow imagine how much money we could make if we didnt have to pay these American jerk offs. Let move everything over seas." Then boom the company is no longer what it was and falls to its knees. Everyone stand around saying wow what happened. Well Dell isnt Dell any more. That's what happened.

[vippy]

03:05 PM on 07/17/2010

not buying Dell! In fact we should boycott all American Companies who send their work overseas!
That includes GM and Ford! Let us buy Nissan, Toyota, Honda, Mazda, who are made right here in the USA, putting our people to work. Who cares if their profits go to wherever!

[stargazer13]

02:33 AM on 07/17/2010

only 9 are ya kidding me !! if this is a joke I am not laughing !!

please you insult the average bear here with this number of 9 :(

[Donna McGregor]

12:45 AM on 07/17/2010

Where's the rest of the list? That didn't even scratch the surface!