Nothing succeeds like success. Just ask any CEO who constantly falls on their face yet makes out unscathed. Take Ron Johnson, the former Apple Inc. (NASDAQ:AAPL) retail genius who ran J C Penney Company Inc (NYSE:JCP) into the ground during his short and disastrous tenure as the chain’s leader before he got the boot in 2013.
While JCP didn’t pay Johnson a golden parachute, he didn’t need one since he was given a restricted stock award of $25 million when he took the job. Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer will net $141 million after the Verizon (NYSE: VZ) acquisition closes, a fitting end to her ineffective leadership of the pioneering internet media company.
Then there’s Microsoft Corporation’s (NASDAQ:MSFT) Steve Ballmer, who mismanaged the world’s largest software company and retired with a fortune valued at $15.2 billion. Fittingly, Ballmer, who overpaid for acquisitions such as Skype, paid $2 billion for the Los Angeles Clippers, the most anyone has spent on an NBA team.
Sadly, there are no shortages of CEOs whose vanity and incompetence is destroying shareholder value. The corporate chieftains that I have highlighted below aren’t doing their shareholders any favors. In an ideal world, they would have lost their jobs already, but I have learned long ago that the CEOs pundits want to see get the boot wind up staying on the job. So let’s just call this a list of CEOs that are lucky to have their jobs.
The list below is in no particular order.
Fortune 500 CEOs: John Mackey, Whole Foods (WFM)
YTD Stock Performance: 13%
Don’t get too excited about Whole Foods Market, Inc. (NASDAQ:WFM) stock price, which is the result of buyout speculation after activist investor Jana Partners took a position in the organic grocery chain. Mackey deserves credit for popularizing healthy natural foods, but he became complacent as larger rivals such as Kroger Co (NYSE:KR) and Wal-Mart Stores Inc (NYSE:WMT) entered the market and now dominate it.
Mackey, who shared the CEO title with Walter Robb until last year, has failed to shed WFM’s “Whole Paycheck” image. The chain has reported six straight declines in same-store sales, a performance that simply is unacceptable.
Finding a buyer for WFM won’t be easy. Amazon.com, Inc. (NASDAQ:AMZN) reportedly took a pass. If Jana is able to gain some traction, it will be difficult to imagine Mackey staying on the job.
Fortune 500 CEOs: Steve Ells, Chipotle (CMG)
Chipotle Mexican Grill, Inc.’s (NYSE:CMG) stock price performance is a bit of a head scratcher considering the company’s continued subpar earnings performance. Maybe Wall Street is excited that same-store sales “only” fell 4.8% in the fourth quarter, an improvement from the 20% decline since in the October quarter.
Those numbers, however, don’t tell the whole story since Chipotle still hasn’t recovered from the tsunami of bad publicity it endured from when diners were sickened by the chain’s food in 2015. Many diners are returning to CMG because it has been giving away free food.
Wall Street pundits have predicted that CMG would eventually get over its public relations challenges, a miraculous event that has yet to occur. Activist investor Bill Ackman took a position in CMG last year and has two representatives on the board. The company even pushed out Monty Moran, who had been Co-CEO with Ells since 2009, in December.
Ells recently made matters worse for CMG by taking ill-advised shots at competitors like McDonald’s Corporation (NYSE:MCD) and Panera Bread Co (NASDAQ:PNRA) over food quality, ironically enough. He still runs CMG as if it were a corner burrito stand insisting on using small farmers who can’t handle the demands of a national restaurant chain. He just doesn’t seem to appreciate the magnitude of the challenges CMG faces.
Fortune 500 CEOs: Heather Bresch, Mylan (MYL)
Mylan N.V. (NASDAQ:MYL) CEO Heather Bresch became one of the most hated executives in America last summer when it was revealed that her company had jacked up the price of its EpiPen allergy treatment by a whopping 400%. Bresch’s inept response to the public relations crisis is reason enough to send her packing.
Unfortunately, MYL problems are getting worse. Not only is the drug company having to recall EpiPens because of worries that they won’t work properly, it faces hundreds of millions in fines for allegedly overcharging Medicare. MYL now is facing a racketeering lawsuit over EpiPens.
As if the company doesn’t have enough problems, the FDA rejected MYL’s application to sell a generic version of GlaxoSmithKline plc (ADR) (NYSE:GSK) hit asthma and COPD treatment Advair. I can’t imagine Bresch has too many chances left to prove herself.
Fortune 500 CEOs: Jack Dorsey, Twitter (TWTR), Square (SQ)
YTD: -12% (TWTR), +24.5% (SQ)
When Jack Dorsey was picked as the latest in a depressingly large number of CEOs for Twitter Inc (NYSE:TWTR), the Wall Street Journal struck an optimistic note, arguing the company was, “Entrusting its founding architect to reassure investors and revive the social-media service’s sagging user growth.”
Unfortunately, Dorsey has done neither of these things. It’s earnings and user growth continue to disappoint Wall Street. Top executives continue to flee TWTR at such a torrid pace that it’s hard to remember them all.
Worst of all, Dorsey continues to run Square Inc (NYSE:SQ) at the same time he runs TWTR, proving that no one can be two places at the same time. Getting rid of Dorsey should be a no-brainer.
Fortune 500 CEOs: Kevin Plank, Under Armour (UAA)
Under Armour Inc (NYSE:UAA) talks a good game about shareholder value, but ultimately doesn’t back up its words with deeds. Plank, who founded the Baltimore-based company, voluntarily asked the company to slash his base salary in 2008 from $500,000 to its current level of $26,000.
Last year, his earned a whopping $33,575, missing a $2 million equity award. No one needs to shed any tears for Plank who reportedly is a billionaire, and according to the Wall Street Journal earns a tidy profit selling services to UAA.
Under Plank’s leadership, UAA has failed to keep with fashion trends and growing competition in the market from Nike Inc (NYSE:NKE) and Adidas AG (ADR) (OTCMKTS:ADDYY) among others. His tone-deaf political comments annoyed some of his company’s key partners, such as basketball player Steph Curry, and may have damaged his brand.
To top it off, UAA’s stock also is the worst-performer in the S&P 500 this year. Though some analysts are predicting that UAA will regain its lost mojo, I am skeptical, especially given its horrible first-quarter results.
Good thing Plank is UA’s largest shareholder or else he would have lost his job long ago.
As of this writing, Jonathan Berr did not hold a position in any of the aforementioned securities.