4 Tech CEOs Who Should Get the Boot NOW

by Tom Taulli | August 23, 2013 3:12 pm

Dead Dow StocksIn case you missed it, the big news today was that Microsoft’s (MSFT[1]) Steve Ballmer will be stepping down[2] within the next 12 months. And considering the fact that the PC-centric giant has been struggling for years, and that the head honcho whiffed big-time on mobile[3], this should hardly be a surprise.

Of course, this isn’t the first departure of a high-profile tech name we’ve seen this year. There was also Groupon’s (GRPN[4]) Andrew Mason[5] and Zynga’s (ZNGA[6]) Mark Pincus … who really fired himself[7].

Even that broader trend shouldn’t be that shocking, though, as the tech industry is fraught with risks. It’s pretty common for disruptive changes[8] to emerge and take down incumbents. Even once-great CEOs can go stale — as is the case with Michael Dell. The man seems to have simply lost his fire.

Yet plenty of sub-par CEOs are still sticking around. With that mind, let’s take a look at four that should get the boot.

Compare Brokers[9]

Stephen Elop

NokiaCompany: Nokia
CEO Since: 2010
Return During Tenure: -59%

First up, we have Stephen Elop — the head honcho at fading cell phone pioneer[10] Nokia (NOK[11]). When coming on board, Elop wrote a memo with an interesting title: “Burning Platform.” In it, he compared the Nokia smartphone business to a person that’s standing on a burning oil platform.

Unfortunately, the platform is still burning … and it may just sink into the ocean!

Sure Elop — a former Microsoft executive — struck a partnership deal with the software giant to use the Windows operating system. But that’s proven to be a strategic blunder. As seen with Nokia’s Lumia phones, the uptake has been lackluster. In hindsight, it seems that Google’s (GOOG[12]) Android platform would have been a better choice.

In the second quarter, Nokia sold only 7.4 million units — 700,000 below the consensus estimate. The average sales price also slid, indicating that the Lumia brand is fairly weak.

Compare Brokers[9]

Thorsten Heins

Blackberry 185Company: BlackBerry
CEO Since: 
Return During Tenure: 

BlackBerry (BBRY[13]) CEO Thorsten Heins — who took the reins in early 2012 — did not write a pithy memo[14]. Instead, he said this when he took the top spot: “I don’t think that there is a drastic change needed.”


When I first heard that quote, I said that it was “the kind of quote that will live in infamy.” And no doubt, BlackBerry has continued its death march. The BB10 operating system, as well as the Z10 and Q10 models, have been mostly duds.

There was also the inexplicable Heins decision to hire Alicia Keys as the global creative director. If he wanted to jazz up the image and appeal to the cool, young crowd, maybe he should have hired Ke$ha?

Now it looks like Heins’ role is to find a buyer — for the whole company or pieces of it[15]. Either way, his time at the helm has hardly been impressive.

Compare Brokers[9]

Scott McGregor

Broadcom BRCMCompany: Broadcom
CEO Since:
Return During Tenure:

Semiconductor company Broadcom (BRCM[16]) is at the core of one of the hottest trends in tech: mobile. But the company’s CEO, Scott McGregor, has not been able to keep up with his rivals like Qualcomm (QCOM[17]) … perhaps because the company has been distracted with other businesses like networking and broadband chips.

Whatever the reason, McGregor seems more like an industry follower, not a leader. And this may be starting to bite into the business in a material way. Just look at the dismal Q2 earnings report, which saw the wireless business fall 3%.

While the stock is in the black over McGregor’s entire time at the helm, BRCM has shed an ugly 24% so far in 2013 … with 20% of that slide coming in the last month.

Compare Brokers[9]

Richard Rosenblatt

Demand Media DMDCompany: Demand Media
CEO Since:
Return During Tenure:

Demand Media’s (DMD[18]) co-founder and CEO Richard Rosenblatt took his company public in January 2011. The stock was priced at $17, which was above the $14 to $16 range. On its first day of trading, the return was about 33%.

Since then, though, shareholders have had little to cheer about.

Basically, the focus of Demand Media is on aggregating websites and leveraging online advertising to monetize things. But the business model has had some glaring problems.

First of all, there has been a heavy reliance on the Google’s (GOOG[12]) search engine. But since the algorithms change from time to time, the impact can be severe on DMD. In fact, this happened again in Q2 as revenues grew at only 9% to $101.1 million compared to a 17% rise in the first quarter.

And the biggest problem is that Rosenblatt has not been proactive with new trends. Keep in mind that he’s been slow to move into categories like e-commerce, mobile and subscriptions.

Tom Taulli runs the InvestorPlace blog IPO Playbook[19]. He is also the author of High-Profit IPO Strategies[20]All About Commodities[21] and All About Short Selling[22]. Follow him on Twitter at @ttaulli[23]. As of this writing, he did not hold a position in any of the aforementioned securities.

  1. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  2. stepping down: https://investorplace.com/2013/08/steve-ballmer-stepping-down-at-microsoft/
  3. whiffed big-time on mobile: https://investorplace.com/2013/08/ballmer-bows-out-and-investors-cheer/
  4. GRPN: http://studio-5.financialcontent.com/investplace/quote?Symbol=GRPN
  5. Andrew Mason: https://investorplace.com/ipo-playbook/masons-wild-ride-comes-to-an-abrupt-end/
  6. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  7. who really fired himself: https://investorplace.com/2013/07/zyngas-back-in-the-game/
  8. disruptive changes: https://investorplace.com/2013/07/5-disruptors-seeing-their-stock-go-parabolic/
  9. Compare Brokers: https://investorplace.com/options-trading/broker-center/
  10. fading cell phone pioneer: https://investorplace.com/2013/08/smartphones-nokia/
  11. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK
  12. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  13. BBRY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBRY
  14. memo: https://investorplace.com/2012/01/research-in-motion-ceo-thorsten-heins-rimm/
  15. for the whole company or pieces of it: https://investorplace.com/2013/08/who-if-anyone-might-buy-blackberry/
  16. BRCM: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRCM
  17. QCOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=QCOM
  18. DMD: http://studio-5.financialcontent.com/investplace/quote?Symbol=DMD
  19. IPO Playbook: https://investorplace.com/ipo-playbook/
  20. High-Profit IPO Strategies: http://goo.gl/TXQsz
  21. All About Commodities: http://goo.gl/FfP8R
  22. All About Short Selling: http://goo.gl/t5Jzb
  23. @ttaulli: https://twitter.com/ttaulli

Source URL: https://investorplace.com/2013/08/4-tech-ceos-who-should-get-the-boot-now/
Short URL: http://invstplc.com/1nv8N8V