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May 28, 2009

America's Worst Technology CEOs

Business magazine Conde Nast Portfolio has compiled a list of America's 20 worst-ever CEOs. The list that has been made after consulting with a panel of business school professors identifies the business "leaders who helped drive their companies into the ground."

The list includes "six men who helped make today's economy stink", writes the magazine. Topping the Worst CEOs list is Dick Fuld, under whose stewardship Lehman Brothers became the world's biggest ever bankruptcy candidate and marked the epitome of the current global economic crisis.

The list also includes some names from the IT and telecom industry who are said to be responsible for their company's wretched performance. Here's meeting up with the `disaster' tech CEOs.
Bernie Ebbers, WorldCom
Bernie Ebbers, WorldCom
At no. 5 on the Worst CEO list is Bernie Ebbers, the co-founder of the telecommunications company WorldCom. Rated by Forbes in 1999 as one of the 200 richest Americans, the magazine describes Ebbers as, "The ultimate corporate shopaholic, who bought an obscure telephone carrier in the 1980s and went on a 17-year acquisition binge that turned it into the world's largest telecom company."

However, "his passion for deal making didn't translate into the savvy necessary for running the complex business. When telecom stocks went south in 2000, the company's massive debt was exposed. Ebbers tried to disguise it through fraudulent accounting," writes the magazine.

In 2005, three years after WorldCom filed for bankruptcy, Ebbers was sentenced to 25 years in prison for leading the largest corporate fraud in US history.

Mississippi-based WorldCom filed for bankruptcy - also the largest in US history - in 2002. It later re-emerged under the name MCI Inc.

John Akers, IBM

John Akers, IBM
At no. 10 on the list is ex-IBM CEO John Akers. "While the rest of the world was moving toward personal computing, Akers remained stuck in the mainframe age, never quite figuring out what to do with IBM at a critical point in the tech industry’s evolution. Many outsiders viewed Akers as being in over his head. IBM was paralyzed by his lack of decisiveness," writes the magazine.

In December 1992, IBM announced to cut some 25,000 jobs worldwide (first time in IBM's history). In another painful break with IBM tradition, Akers said that the company probably would have to cut the dividend it pays to shareholders.

Akers stepped down in April 1993 shortly after the company announced a $4.97 billion net loss for the year 1992.

Bob Allen, AT&T

Bob Allen, AT&T
At no. 12 is AT&T's Bob Allen. "Allen misjudged where the telecom industry was going. He forced a disastrous merger with computer company NCR Corp and allowed AT&T to wither under his lack of strategic direction," writes Conde Nast.

In 1997, Time termed AT&T a "monolithic screwup" after the company lost more than $12 billion in market value in a few months. To stem the company's losses on his watch, Allen had to lay off 50,000 AT&T employees.
John Sculley, Apple

John Sculley, Apple
At no. 14 is John Sculley, the man said to be behind Steve Jobs exit from Apple in 1985. Incidentally, it was Jobs who brought Sculley from Pepsi in 1983.

Though a brilliant marketer at Pepsi, he proved to be disastrous as the top manager of a tech company and unsophisticated about the technology field. His tenure was marred by infighting among top managers and expensive projects (like Apple Newton) that flopped in the marketplace, according to Conde Nast.

Sculley boosted the price of the Macintosh when personal computer prices were falling. The board ousted him in 1993, when Apple was slipping towards bankruptcy.

In May 1987, Sculley was named Silicon Valley's top-paid executive, with an annual salary of $2.2 million.
Carly Fiorina, HP
Carly Fiorina, HP
In 2005, one of the most powerful women in corporate America, Carly Fiorina, Chairman and CEO, Hewlett-Packard, was forced out of the company by its board. The news saw HP shares jump by as much as 10.05 per cent (during intra-day trading) on bourses.

According to Conde Nast, "A consummate self-promoter, Fiorina was busy pontificating on the lecture circuit and posing for magazine covers while her company floundered. She paid herself handsome bonuses and perks while laying off thousands of employees to cut costs. The merger Fiorina orchestrated with Compaq in 2002 was widely seen as a failure."

HP stock lost half its value during Fiorina’s tenure. HP stocks became laggards as compared to the shares of rivals such as Dell and IBM.

Fiorina joined HP in 1999 after a successful career at Lucent and AT&T, mostly in sales and marketing.
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