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Wall Street’s 5 Biggest Villains


Wall Street finds itself villainized quite often nowadays. The resent and ire that developed after the financial crisis and subsequent bank bailouts haven’t entirely faded.

gordon-gecko-wall-streetMismanagement, overpay, poor stock performance, golden parachutes, insensitive comments and a general holier-than-thou attitude, to name a few, are the stereotypical traits of  some of Wall Street’s elite that the Average Joe will loathe until the end of  time.

So earning a spot as one of Wall Street’s biggest villains isn’t easy to do. Indeed, to make this short, ignominious list, these five supervillains of corporate America have had to consistently — year in and year out — foster the scorn of the masses.

That’s no small order, but these five managed to do it. So, without further ado: Wall Street’s 5 biggest villains.

Wall Street’s Biggest Villains:  #5 — The Waltons, Wal-Mart Stores, Inc. (NYSE:WMT)

Walmart WMT stockI know, I know. It’s not fair to indict an entire family as villainous. But the Waltons — whose power and riches derive from Sam Walton, the founder of Wal-Mart Stores, Inc. (NYSE:WMT) and Sam’s Club — have several villains in their camp, so it’s best to lump them together and brand them as a family.

Boasting an absurd amount of wealth does not in itself make you a villain. But to understand why the Waltons are some of Wall Street’s biggest antihero’s, we must understand the obscene girth of their bank accounts.

In 2014, there were two Waltons gracing the list of the top 10 richest people in the world. This year, the same was true, as Christy and Jim Walton were worth a combined $72 billion. All in all, the family is worth more than $140 billion — a sum that exceeds the wealth of the bottom 40% of Americans combined.

Gawker has called them “the greediest family in the world,” a point that’s hard to argue. The family’s lifetime contributions to its own charitable foundation, the Walton Family Foundation, reportedly amounts to just 0.04% of their cartoonishly vast wealth. No Walton has agreed to The Giving Pledge, a campaign led by Bill Gates and Warren Buffett which asks the world’s billionaires to give a majority of their wealth to philanthropy.

The two Waltons serving on the Wal-Mart Board of Directors have faithfully demonstrated this lack of empathy in the boardroom as well. Wal-Mart workers across the country have staged strikes for three years running now in an effort to push for better wages and hours.

In the past, Wal-Mart’s response to these very human requests has been both morally repugnant and illegal: A National Labor Relations Board judge found that Wal-Mart had illegally punished employees at a California store who were threatening to join a prior strike.

Wall Street’s Biggest Villains: #4 — Mark Pincus, Zynga Inc (NASDAQ:ZNGA)

znga stock zyngaMark Pincus, co-founder of social gaming company Zynga Inc (NASDAQ:ZNGA) is another Wall Street villain worthy of ire.

Pincus timed Zynga’s IPO perfectly, and ZNGA stock debuted in late 2011, going public at $10 per share. After a fleeting rally sent the stock to highs near $15, however, it’s been gloom and doom ever since. By November of 2012, ZNGA stock was trading for $2 and change, and remains below $3 per share today.

That didn’t stop Mr. Mark Pincus from making a fortune though. When the stock was beginning its precipitous descent, he and other insiders were able to get out of their lockups — agreements that prohibit insiders from selling shares in a stock until typically 180 days after the IPO —  early.

Class action lawsuits followed, and one claimed that

“[While] Zynga insiders were able to sell their holdings at $12 per share before Zynga’s second quarter financial results were announced, Zynga’s non-executive employees and other public shareholders suffered colossal losses on their investments.”

Not a bad strategy, especially if you’re a Wall Street villain.

Although he began as Zynga’s CEO, Marc was forced to step down when the horrible performance of ZNGA stock swung investor sentiment firmly against him.

Go figure.

Today Pincus is Chief Product Officer and Chairman at Zynga. As Chairman, he helps oversee the company’s new CEO, Don Mattrick. Mattrick made nearly $58 million in his first year on the job. (Fun fact: Zynga hasn’t posted positive EPS since 2009.)

Wall Street’s Biggest Villains: #3 — Paul A Ricci, Nuance Communications Inc. (NASDAQ:NUAN)

Nuance Communications, Inc. NUANPaul Ricci is the CEO of Nuance Communications Inc. (NASDAQ:NUAN). Paul Ricci is absurdly overpaid. Obscene pay can be justified, but Ricci’s is not. NUAN stock is off more than 13% in the last year, 41% in the last two years, and still has a negative return going back five years.

Ricci now has the dubious distinction of landing on Fox Business’ “Worst CEOs” list for two consecutive years.

A 2013 Business Insider piece pegged Ricci’s annual compensation at $37.1 million — a 79% increase from 1999. That means that in 1999, Ricci made $20.7 million. This guy has been making tens of millions of dollars each year for the last 16 years. The problem has gotten so out of hand, the financial media has started calling for his head.

In the wake of the hubbub, Ricci, generous soul that he is, has taken a pay cut. His most recent compensation is a meager $17.94 million.

Wall Street’s Biggest Villains: #2 Eddie Lampert, Sears Holdings Corp (NASDAQ:SHLD)

sears logo shld stockEddie Lampert, chairman and CEO of Sears Holdings Corp (NASDAQ:SHLD), is a polarizing figure. Most investors are on the side of the pole that sees Lampert as a horribly inept executive in denial. 

Lampert’s ineptitude is no longer a punchline in financial circles — it’s something that too many people have known for too long, and watching his attempts to guide Sears through a poorly maneuvered turnaround feels like watching a car wreck in slow motion. Last year, he was named by the BBC, Fox Business, Yahoo! Finance, Forbes, and Professor Sydney Finkelstein of the Tuck School of Business at Dartmouth as one of the worst CEOs of 2014.

And according to numbers on the careers website Glassdoor, Lampert also boasts the worst employee approval rating of any CEO on its site.

SHLD stockholders are probably some of Eddie’s sharpest critics. Sears managed to lose more than half a billion dollars in a single quarter last year, and SHLD has now posted nine straight quarters of losses and seven straight years of declining sales.

Loathed by investors, employees, and the financial media alike, Eddie Lampert’s awful track record and bumbling efforts to revive Sears earn him a spot as the No. 2 biggest villain on Wall Street.

Wall Street’s Biggest Villains: #1 —  Jamie Dimon, JPMorgan Chase & Co. (NYSE:JPM)

JPM stock JPMorgan Chase NYSE:JPM JPM stockTry as one might, no one plays the role of Wall Street villain quite like Jamie Dimon, Chairman, President and CEO of JPMorgan Chase & Co. (NYSE:JPM), the nation’s largest bank by assets.

Dimon has been the CEO of JPMorgan since December 2005, but only slithered his way into mainstream America’s consciousness during the 2008-2009 financial crisis, when it was quickly becoming apparent that the backroom shenanigans at a handful of major commercial banks was hastening the economy’s collapse.

Main Street Americans grew to hate Dimon as JPMorgan took a $25 billion bailout from the government in 2008. He is one of the few prominent Wall Street CEOs to retain his job after the crisis, but JPM stock has severely underperformed the market in the last five years.

JPM stock has returned just 45% in those five years — half as good as the S&P 500‘s return over the same period. You’d never realize how poorly JPM stock has done if you were going off of Mr. Dimon’s salary, however. The highest-paid bank executive in America, Dimon got a 74% raise in 2013, and is scheduled to earn even more than that in 2014.

In the years leading up to the financial crisis, Dimon was really cashing in: He made $39.1 million in 2006.

While perhaps not as callous or inept as others on this list, Dimon’s sky-high salary year-in and year-out is just the sort of high-and-mighty thing a true villain of Wall Street would embrace with pride.

As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/01/wall-streets-biggest-villains/.

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