Top 10 worst chief executives

Top 10 worst chief executives

Last week we profiled our choices for the top 10 chief executives in the technology business, so it's only fair that this week we give you a selection of the worst.

For every great chief executive who inspires staff and makes farsighted business decisions, there's usually two or three absolute stinkers who make life miserable for employees and shareholders alike.

In many ways this was a tougher list to write. There were a lot of names to choose from, to be sure, but what distinguishes a bad chief executive from a truly bad one?
Below you'll read about bosses riddled with ineptitude, destroying a company's esprit de cours or just being so pig-headed that they refuse to accept reality.

The end result is the longest and most detailed top 10 list we've ever written. There was something about the topic that really inspired us both to let it all out.

When you've sat though insanely optimistic PowerPoint demonstrations, interviewed management who lie through their teeth or just had to listen to overenthusiastic pitches, an article like this comes as something of a relief.

As ever, we've also added a couple of honourable mentions at the end, at least one of which may surprise you. Feel free to add your own choices in the comments section below.

10. Vladimir Tsastsin - EstDomains
Shaun Nichols: It's not that Tsastsin did a bad job running his company; he did after all turn it into a rather successful registrar, albeit a notoriously shady one. The problem was that he also pretty much destroyed the company singlehandedly when he was convicted on several counts of fraud and money laundering.

Although Tsastsin says he no longer holds the top position at the company, and that he is appealing against the conviction, Icann decided that the case was serious enough to warrant pulling EstDomains' accreditation, effectively killing the company.

Iain Thomson: Shaun was very brave in nominating Tsastsin and I applaud him for it, considering the low cost of Mafia hitmen. I would like to point out to them that this was his decision, and I think Tsastsin is a lovely man who is kind to puppies.

But seriously, for Icann to have actually stirred itself into action EstDomains must have been doing something really bad. Icann usually shows all the drive and purpose of a week-old beached whale, and that it took action at all shows Tsastsin deserves to make the list.

But there's a serious point to this. Spam and malware don't just appear from the blue; they need people to facilitate them. As we've seen with McColo and Intercage these companies make life hell for the rest of us, and anything that can be done to make life difficult for them should be done.

9. Patricia Dunn - HP
Shaun Nichols: Technically, Dunn shouldn't be on this list. She was, after all, on the board of directors and chairman at HP. However, Dunn's ability to totally screw up the company she helped direct was just as destructive as any chief executive, so we'll cheat a bit and add her to this list.

Dunn, of course, was the person who masterminded HP's 2006 investigation into the source of boardroom leaks. Dubbed Kona 2, the investigation was successful in rooting out the director responsible for the leaks (George Keyworth) but the methods caused far greater problems for the company than any leaked story.

Investigators used a variety of less-than-legal methods to obtain the information. Most notably, they obtained phone records for reporters and board members by way of 'pretexting', or calling carriers and lying about their identities. Spyware-laced emails were also sent, and Dunn was even said to be mulling over the placement of spies in newsrooms.

The results were, of course, disastrous for HP as a company and all those involved in the case. It faced a public relations nightmare, and Dunn found herself among five people who were charged with conspiracy and fraud.

Iain Thomson: The irony is that were it not for the honourable nature of one HP director this story would never have got out.

Tom Perkins resigned from the board when the tactics were announced, and eventually leaked the story after it became clear that HP was not going to reveal the reason for his departure to the US Securities and Exchange Commission. Even when it all came out Dunn continued to cling to power until a sustained campaign by Perkins did her in.

In her defence it is entirely possible that Dunn had no idea that illegal measures were being used to get the information she wanted. But the fact that she was prepared to launch the investigation at all shows serious deficiencies of character. To sit in board meetings with people she was spying on and look them in the eye takes some chutzpah.

But to compound the error all she had to do was ask who the informant was. When she exposed Keyworth he said as much himself, but it doesn't seem to have occurred to her to do so. All in all a sad end to her career.

8. Terry Semel - Yahoo
Shaun Nichols: While Jerry Yang takes the blame for the recent spectacular collapse of Yahoo, Semel definitely gets an assist. Once the big bully on the block (albeit one hit heavily by the dotcom bust) Semel's reign saw Yahoo waste away from a can't-miss internet titan to an ageing firm with little focus and an eroding revenue base.

When Semel left, the company found itself mired with a pack of unprofitable ventures described by one vice president as "peanut butter spread thinly on a slice of bread", and far behind rival Google, which Semel once reportedly balked at a chance to acquire. Semel was also linked to failed attempts to buy Facebook and YouTube.

The departure of Semel almost certainly caused some optimism among Yahoo employees, many of whom must have thought that his successor couldn't possibly do any worse. As we will see later in the list, however, those thoughts were proved very, very wrong.

Iain Thomson: Semel was a curse on Yahoo, and a very expensive one. When you look at how much money he took from the company in salary and bonuses, and compare it to the results he achieved, the dichotomy becomes clear.

Under his reign Yahoo went from being one of the biggest names in the internet industry to being an also-ran fought over by bigger and better companies. Yahoo had no focus, no drive and no new ideas.

But what I really dislike about the man is that he approved the handing over of customer details to the Chinese authorities, leading to long jail sentences for people whose only 'crime' was free speech, a right built into the Chinese constitution even if ignored. Add in the harm it did Yahoo's reputation and you've got a huge mistake.

At first Yahoo denied the move, and Semel later said that he felt bad about the decision. I'm sure that's a lot of comfort to the poor souls currently labouring in a Chinese prison camp.

7. Henry T Nicholas III - Broadcom
Iain Thomson: OK, I've got to be a bit careful on this one as Nicholas is still only under indictment, but here's why I think he should be on the list.

Nicholas co-founded Broadcom, which manufactures circuitry for broadband equipment. In fact, you may well have some of their parts in your systems. It's a largely successful company, although it's one of many to have violated the GPL licence. But under Nicholas's reign Broadcom has become known for, shall we say, irregularities.

This much is a matter of record. He left the firm in 2003 but in July 2006 the company announced that it was having to subtract $750m from its earnings, and doubled that figure a few months later. But in 2007 the figure had risen to $2.24bn from its financial results from 1998 to 2003, and the authorities decided to take a look.

The allegations that have since emerged have been so extreme that it threatens the image of IT as boring. Nicholas is alleged to have drugged business executives, hired prostitutes and maintained an extensive drug warehouse.

One allegation recounts how he and other executives smoked so much marijuana on a plane ride that the pilot had to don an oxygen mask. Builders at his home are suing him for non-payment for their job of building an underground 'sex cave' at his home, replete with secret chambers and a huge bar.

What makes these claims odd is that Nicholas was seen as rather straight-laced by many. He liked staff in suits and ties and was a strong campaigner for criminal justice to toughen up and support victims as well. If they are true, it may be a classic case of denial, like those of Senator Larry Craig and church leader Ted Haggard.

In April of this year Nicholas checked himself into the Betty Ford Clinic and is currently awaiting trial on drugs, conspiracy and securities fraud charges.

Shaun Nichols: The environment in many technology companies is often likened to that of dorm halls at Stanford or MIT. Broadcom was a bit more like a USC frat house.

Hotboxing entire jets and building underground sex-caves is the stuff of legend - if you're a heavy metal band. For a business executive, it's just a shameful and depressing episode of excess and mismanagement.

On the other hand I'm sure that many of the young men who worked for Broadcom didn't mind that much; drugs and prostitutes beat the heck out of a wine country gift basket or being named employee of the month as an incentive package.

On another note, how often can you say that allegedly cooking the books to the tune of $2bn wasn't even the worst thing you did as chief executive?

6: John Sculley - Apple
Iain Thomson: When Steve Jobs convinced Sculley to head up Apple with the famous quote "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?", it looked like a great fit.

Sculley had been the youngest ever president of PepsiCo (albeit while married to the chairman's daughter) and was a genius at marketing and organisation. But he quickly showed that he didn't get the tech industry.

At first all looked good. He introduced much needed stock control and purchasing reform, adding millions to the balance sheet. Then he committed the ultimate sacrilege by kicking Jobs out of his own company.

After taking away the existing leader he then didn't keep control of the company. Under his leadership Apple grew initially and had a chance to dominate the PC industry. Instead it dissolved into petty power play by managers who wasted millions on personal projects and reorganisations that left staff confused and demoralised.

Sculley also kept the price of Apple hardware high at a time when PC prices were falling. This was what relegated Apple to an also-ran in terms of market share. Who would buy a $10,000 Mac llfx when you could buy a PC for half as much? PC prices continued to drop, while Apple's stayed constant or even rose.

Other errors included licensing parts of the Apple GUI to Microsoft, which proved very expensive in court, and disastrously spinning off the software division. Sculley was also involved with the Power PC debacle. Overall, his 10-year tenure can be seen as Apple's darkest hour.

Shaun Nichols: Sculley showed an early example of how the technology world differs from other business models. Pepsi and Coke have had the same competing products for decades. The most threatening advance either company can make is a new can design or marketing campaign, New Coke being the exception that proves the rule.

In the tech world, however, innovation trumps all. A snazzy marketing campaign or a new product name means nothing if the hardware behind it doesn't offer something new or exciting.

Sculley never really caught on to the Apple ethos that new products should either be mind-blowing or not made at all. There's a story that, shortly after returning to Apple, Jobs called in the engineers and placed before them a table of the products which had been in development under the old regime.

"What do all these products have in common," Jobs is said to have asked. When no-one was able to answer he told them: "They are all worthless."

Merciless as it may have been, the story illustrates a key difference between Apple under Jobs and Apple under Sculley.

5. Darl McBride - SCO
Iain Thomson: Bill Gates must have loved Darl McBride. After years of being the most hated man in the industry, McBride came along in 2002 and took Gates's crown in a heartbeat.

McBride took less than a year to doom the company by launching a legal attack on IBM claiming that SCO's Unix source code had been used in Linux and as such SCO wanted paying $1bn.

This was widely interpreted by the open source community as an attempt by SCO to take control of Linux, something SCO reinforced in May by sending out letters to companies pointing out the dangers if they tried using Linux.

SCO then started suing other big names while McBride touted himself through the media putting his case that SCO was the wronged party, while all the time refusing to say explicitly what code had been misappropriated. He also started upping the damages requested from IBM, first to $3bn and then to $5bn.

So far so good, it must have seemed. SCO's share price was on the up and, speaking to journalists, McBride seemed cocky and sure of himself. He was offering licences to use Linux, which were largely ignored by everyone else.

But he had not thought the situation through or else he wouldn't have been so cocksure.

Legend has it that a team of lawyers lurk in a special sealed basement cell at IBM's headquarters. Strange moans emanate from its dark depths and the legal eagles sit in semi-darkness discussing arcane points of law while sharpening their teeth on the bones of past victims. After SCO filed suit, the hounds were unleashed.

IBM countersued, quickly followed by Red Hat and Novell, which pointed out that it owned the rights to Unix. SCO asked for more time and a date for the trial was moved to 2004. SCO kept shifting its position, first claiming hundreds of lines of stolen code, then millions and even going as far as to suggest that the GPL violated the US Constitution.

Meanwhile IBM's lawyers were killing his case in death by a thousand cuts. IBM basically challenged SCO to put up or shut up on evidence of stolen code and, although SCO tried to delay, IBM had the case dismissed. Novell, meanwhile, won its case that it owned the rights to Unix and not SCO.

There are still legal cases pending but as of today SCO has filed for Chapter 11 bankruptcy protection and has been delisted from Nasdaq. It has been reported that McBride sometimes carries a gun, has protection at public events and that the latest rescue package insists that he is removed from the company. I pity the next company he heads up.

Shaun Nichols: McBride has no shortage of chutzpah, I'll grant him that much. Taking on IBM's legal team for the rights to Linux is a bit like trying to storm Fort Knox with two trained monkeys and a slingshot.

The SCO case did accomplish one good thing, however. It united once disparate groups of Linux advocates in a common cause, and watching the company slowly get the life choked out of it in the courts was poetic justice in the eyes of many.

A pack of Big Blue lawyers and a crowd of several million fanatical Linux advocates makes for a very powerful collection of enemies. It's no wonder that McBride has become a bit paranoid.

4. Julie Wainwright - Pets.com
Shaun Nichols: Pets.com was one of many businesses that fell apart when the dotcom bubble burst and the site does get unfairly set up as a scapegoat at times. That doesn't mean, however, that Julie Wainwright doesn't deserve a bad rap and a place high on this list for the epic failure that she oversaw.

Pets.com has become an icon for the dotcom bubble and its subsequent collapse. The company's meteoric rise, huge marketing hype and subsequent collapse became the stuff of business textbooks.

But what really guilds Wainwright's place in Silicon Valley's hall of shame was not the business itself, but the mascot. The company used a sock-puppet dog that became the symbol for the dotcom crash (and the first indication that Michael Ian Black was a very annoying human being).

How bad was it? In an editorial for her new women's health site, SmartNow.com, Wainwright admitted the following: "I had people laugh in my face when I introduced myself for years after the company closed. It happened as recently as a year ago. A couple of people asked me what it felt like to be one of the best-known failures in the US. Most just walked away from me."

Iain Thomson: It's very easy to mock dotcom failures (and a surprising amount of fun) but what stands out here is management, or rather bad management.

Pets.com made the classic mistake of overinvesting before it actually had the customers to pay the bills. There was a real 'if we build it they will come' mentality, but the fact remained that customers didn't.

When it became apparent that the company was in real difficulties Wainwright refused to sell it as a going concern, and even had the gall to pay herself nearly $500,000 to wind the company up. Frankly, I'm not surprised she finds herself unpopular at parties.

3: Steve Case - AOL
Iain Thomson: Steve Case makes it onto the list for one of the biggest mergers of all time: AOL and Time Warner.

Case was the whizz-kid who made America Online (later rebranded AOL) into one of the biggest internet operators out there. He hit the market at just the right time and AOL became one of the top internet companies in town with over 30 million subscribers. His strategy was simple: make it easy to get online with AOL software and make the software itself pervasive.

For a time in the 1990s you couldn't buy a technology magazine or get your post in the morning without finding an AOL CD-ROM. There must be billions of the things sitting in landfill sites around the world, and future archaeologists may be left wondering whether some strange cult took hold of the planet, which in a way it had.

At the peak of its success Case made an astonishing decision to merge with Time Warner, one of the blue chips of entertainment. It was described as the first big 'clicks and mortar' companies, a synergy of traditional and new media. The word 'synergy' should have been a warning.

It was a disaster from start to finish. Time Warner executives were barely consulted, and those who were pointed out that it was a stupid idea. The two companies had little in common and even less to offer each other. AOL's valuation was mostly down to market misunderstanding, and Time Warner had very little to gain from the merger.

The one person who did do well out of the merger was Steve Case. He got very rich indeed off the back of it, and got chairmanship of the new company to boot.

Meanwhile the internet bubble imploded, AOL's membership began to slide and has never risen since, and Time Warner executives were left wondering how the y'd been hornswoggled to quite such a degree.

Shaun Nichols: The tech industry views the old business world as lethargic and out of touch. The bricks-and-mortar business world views the tech market as fickle, short-sighted and highly volatile. The AOL-Time Warner deal proved that both sides were right.

The merger was a terrible fit. AOL would have been better off finding a partner with a larger telecoms portfolio that would allow the company to jump quickly into broadband, while Time Warner could have saved itself a lot of time and money by acquiring a smaller, cheaper content provider to serve as its web portal.

In hindsight, a good chief executive would have understood that AOL had to do more to prepare for the transition to broadband. Case either didn't see this or he did and decided to dump his outfit on to Time Warner before anyone realised that bad dial-up service and junk-mailed CDs weren't going to be the future of the internet.

2. Carly Fiorina - HP
Iain Thomson: When Carly Fiorina joined HP in 1999 as chief executive it looked like a good fit. She'd done great things at AT&T and the industry needed more women in top positions.

The next year I was at an HP conference and heard her speak for the first time, and came away even more impressed. Fiorina's keynote got the hairs up on the back of my neck and the HPers in the audience were clearly enthused.

But as time went on the cracks started to show. The HP culture was always very egalitarian and that changed rapidly. Mass layoffs were announced at a time when we began to hear tales of lavish corporate jets and personal grooming assistants, and engineers were rumbling that they were being pushed out of decision making. And then came Compaq.

The Compaq merger was disastrous for the HP Way and signalled the final death rattle of what had been one of the best work cultures in Silicon Valley. The HP family trust fought it all the way, with allegations of dirty tricks flying, but lost their case.

It also wasn't exactly a stellar success; sales were not great, a mass exodus of talent (mainly from the Compaq teams) took place, and the share price stuttered. To compensate, HP became one of the worst offenders at gouging consumers for print toner, making it more expensive to purchase than cocaine.

Finally the board had enough. The value of the company had halved, staff were demoralised and sales were still not up to scratch. Fiorina refused to resign so they gave her the boot, with a suitably huge payout. It was a sad end to what had been a stellar career.

Shaun Nichols: The $25bn price paid for Compaq was among the highest ever and, while it did give HP instant credibility in the enterprise server and workstation markets, it worsened the already problematic morale levels and, as Iain noted, signalled the end of the culture which had defined HP.

It should also be noted that Fiorina is largely credited with the creation of a very dysfunctional boardroom, the same board whose persistent infighting and leaks to the press would set the stage for the infamous 2006 pretexting scandal.

1. Jerry Yang - Yahoo
Shaun Nichols: Few people have managed to screw up a company so spectacularly and so quickly as Yang has with Yahoo in the past year.

The co-founder returned to his old company in 2007 to fix the mess left by Terry Semel. While rough, the situation seemed fixable to many, and the comeback successes of Steve Jobs and Michael Dell had many feeling optimistic about Yang's return.

That optimism turned out to be very, very misplaced. Instead of helping the company regain its focus and get back in touch with what made Yahoo successful, Yang's strong attachment dealt a crushing blow to the company.

As early as 2007, Microsoft had actively pursued an acquisition of Yahoo and its search advertising business. In 2008, those efforts went public, and things got very messy. Microsoft chief Steve Ballmer made it known that his company was willing to put up tens of billions of dollars for Yahoo, at one point as much as $40 per share.

Fuelled by a loyalty to the company he founded, and a disdain for Microsoft and its corporate culture, Yang led a group of Yahoo die-hards on the board into a wholesale rejection of Microsoft's efforts to acquire the company. The board was convinced that it could bring Yahoo's value far beyond what Microsoft proposed through its own growth and partnerships with Google.

The board was very, very wrong. Yang's rebuilding efforts were wounded by the recent economic downturn and then dealt a fatal blow by Google's decision to kill off the proposed deal due to regulatory concerns.

Yang formally resigned, and Steve Ballmer all but laughed in Yahoo's face by declaring any possibility of a deal long since dead. Yahoo's share price currently sits at around $9.

It's understandable that a founder would feel a fierce loyalty to the company and would be averse to an acquisition, but when the company goes public and people start putting their retirement accounts into its stock, what's best for the company's legacy has to take a back seat to what's best for the people who invested in it.

The Yahoo board's inability to grasp that concept meant that many people lost a lot of money, and the company is now on the verge of one of the most spectacular collapses in history.

Iain Thomson: When we sat down to formulate this list we both looked at each other and said 'Well Yang's on there at least.'

On one level Yang had damaged goods to start with. Semel had left the company in a terrible mess and even the best boss would have had a tough job turning things round. That Yang didn't isn't too bad; that he made it worse earns him the number one spot.

I sometimes wonder if Yang lies in bed at night looking at the ceiling and silently mouthing the words '$40 a share' before sobbing gently into his pillow. Self belief that you can take your company to untold heights is one thing, self delusion is something else entirely.

Google was probably seriously concerned that Yang would do a deal with Microsoft, which is presumably why they agreed to do a deal. They could have saved themselves a lot of time and money if they had just made a better read of Yang's stubborn nature.

Shaun raises probably the best point, and it was an argument that clinched Yang's prime spot for me. The duty of a chief executive is to make the best decisions for staff and investors. Yang has done nothing to support either group.

Honourable Mention: Steve Ballmer - Microsoft
Shaun Nichols: Someone has to take the blame for Microsoft's recent gaffes, so why not start at the top? Under Ballmer's watch in recent years, the company's image has gone from a dangerous, calculating superpower to a bumbling giant.

While the Xbox has thrived and Office remains a cash cow, Microsoft hasn't had a lot of big wins in recent years. Internet Explorer is still losing ground to Firefox and Safari, the Zune is all but dead, the company's new online services outfit is playing catch-up to competitors and Windows Vista has become the company's most embarrassing product failure since Bob.

Iain Thomson: Ballmer has been groomed for the leadership role for years, as Bill Gates has shown more foresight than Steve Jobs in recognising that the head man has to go sometime.

Ballmer isn't higher on this list because he hasn't been chief executive long enough to justify it, but the signs aren't good. If even half the stories that come out of Microsoft are true, he's a bit of a bully not above using non-violent physical intimidation to get his way.

Ballmer is a powerful character and a forceful speaker, but he seems to display a distinct failure to accept reality. Even though Vista is about as popular as a rattlesnake in a lucky dip Ballmer insists that it will all come out right in the wash. Although it's early days, I'd be worried if I was a Microsoft employee.

Honourable Mention: Craig Barrett - Intel
Iain Thomson: What's this, I hear you say? Barrett!? Didn't he manage Intel through troubled waters and help make it the powerhouse it is today?

Barrett was very good for Intel in a number of ways but he gets a mention in my book down to one decision, which if had been followed through without resolution, could have seriously damaged the company. The decision? Itanium.

Itanium was very much Barrett's baby, we were told at Intel Developer Forums. He thought it was a great idea and did much to support it. Why that is will remain a mystery, as it was patently clear to a lot of people that the Itanium was being hugely oversold.

Companies don't mind upgrading their systems because they know it makes them more efficient. But Itanium was built to run only 64-bit software which, while the logical successor to 32-bit code, wasn't available in big quantities. Meanwhile AMD was building its own chip capable of running both types of software and it was clear that the market agreed.

Intel gave away free systems to developers in an effort to stimulate code production for Itanium, but sales remained poor and all of a sudden AMD was the hot processor manufacturer on the planet. It wasn't until Intel's 32/64 bit chip came out that Intel got back on track.

Shaun Nichols: In the same way that Steve Ballmer gets saddled with the Zune and Vista fiascos, Barrett has to take the blame for Itanium. While it was an ambitious project, Itanium was a terrible business decision.

You have to believe that at some point in the process someone advised Barrett that not supporting 32-bit code would severely limit the market for the chip.

Fortunately for Intel, the Core2 architecture was able to save the day. AMD's inability to get a quad-core chip to the market for roughly six months after Intel definitely didn't hurt matters much either.

There's also the lingering antitrust battle with AMD which threatens to further tarnish Barrett's legacy.