20 Worst CEOs

1. Dick Fuld

It’s one thing to oversee the collapse of one of Wall Street’s most esteemed firms. But when your hubris triggers a national financial panic as well, you’re a shoo-in for our top prize. Fuld’s reckless risk-taking may have been typical of Wall Street, but his refusal to acknowledge that his firm was in trouble—and take the steps necessary to save it—was beyond the pale. Since filing the largest bankruptcy in U.S. history ($613 billion in debts outstanding), Fuld has been belligerent and unrepentant. Even Bernie Madoff said he was sorry.

: Fuld was recently spotted trying to figure out the Jet Blue check-in machines at La Guardia Airport.

2. Angelo Mozilo

Meet the man who made subprime a household word. Once a symbol of self-made accomplishment—a butcher’s son who built the largest mortgage lender in the country—Mozilo became blinded by success and began going after the riskiest and most unsavory of borrowers to boost his company’s market share. In so doing, he legitimized a sector that would ultimately bring down the economy.

THE STAT: Mozilo’s once-secret, now-infamous “Friends of Angelo” program provided loans on favorable terms to politically influential borrowers, including Senators Kent Conrad and Chris Dodd.

3. Ken Lay

When it comes to bad CEOs, Lay was the complete package: He was not only dishonest but disastrously inept as a manager as well. Lay, who founded Enron and turned it into a $70 billion energy company, was uninterested in the day-to-day tasks of running the business. Consequently, he gave free rein to untrustworthy subordinates like Jeff Skilling and Andy Fastow. He also signed off on a maze of convoluted transactions that formed the basis of a massive accounting fraud that would wipe out investors and bring down the corporation. Lay was convicted of securities fraud in 2006. If he hadn’t died soon afterward, he would have faced as many as 30 years in prison.

THE STAT: Enron stock lost 99.7 percent of its value in 2001.

4. Jimmy Cayne

Talk about an out-of-touch leader. Cayne was playing bridge when two Bear Stearns hedge funds collapsed in July 2007, and was again the following March when a liquidity crisis at the firm led to its emergency sale to J.P. Morgan. Never mind that its share price was $10 (less than 3 percent of its high of $170); Cayne will spend the rest of his days living down reports that one of his other favorite pursuits was smoking pot.

THE STAT: What a difference a year makes: A share price of $10 doesn’t sound too bad these days.

5. Bernie Ebbers

The ultimate corporate shopaholic, Ebbers 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. Alas, his passion for deal­making 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. In 2005—three years after WorldCom filed for bankruptcy—he was convicted of overseeing $11 billion worth of accounting fraud. He’s now serving a 25-year prison term.

THE STAT: When Ebbers resigned, in 2002, WorldCom stock had fallen to $1.79 from a peak of $64.50 in 1999.

6. Al Dunlap

Normally, when an overhyped honcho falls from grace, time must be spent digging up his most egregious public statements, revealing the swagger that preceded the downfall. “Chainsaw Al” Dunlap, in contrast, was just getting revved up when his career conked out and his reputation got shredded.

7. Fred Joseph

As Michael Milken’s boss, Joseph led Drexel to “it” firm status on Wall Street in the 1980s. He then oversaw its plunge into bankruptcy in 1990, after the company was convicted of insider trading and forced to pay $650 million in fines. There was no evidence that Joseph himself committed a crime, but his poor management left the company without a crisis plan. In 1992, Drexel defaulted on $100 million in loans and closed up shop. Unlike Milken, Joseph didn’t go to jail, but he was banished from being a Wall Street CEO for life.

THE STAT: Joseph has since become managing director of Morgan Joseph & Co. In 2007, an industry group named him investment banker of the year.

8. Jay Gould

When it comes to unscrupulous behavior, Gould makes Milken look like a sweetheart. A railroad developer and speculator, Gould sold out his associates, bribed legislators to get deals done, and even kidnapped a potential investor. He duped the U.S. Treasury, pushing up the price of gold and prompting a scare on Wall Street that depressed all stocks. After hiring strikebreakers during a railroad strike in 1886, he was reported to have said, “I can hire one half of the working class to kill the other half.”

: When Gould died, his fortune was worth an estimated $67 billion in inflation-adjusted dollars.

9. John Patterson

The tyrannical Patterson liked to fire and then rehire executives to break their self-esteem. He banned “harmful” foods—including bread and butter—from company premises and had employees weighed and measured every six months. In 1913, he and 29 NCR officials were convicted of various antitrust violations, including the use of “knockout men” to intimidate store owners and keep them from buying from NCR’s competitors. (The conviction was overturned a year later.) Patterson may be best known for firing Thomas Watson, who went on to build IBM.

THE STAT: Today, NCR is worth $1.5 billion.

10. 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.

THE STAT: Akers stepped down shortly after the company announced a $4.97 billion net loss for 1992.

11. Henry Frick

A father of the modern steel industry (along with his business partner, Andrew Carnegie), Frick was a vicious antiunionist who was once voted the most hated man in America. His response to a strike at one of his steel mills—which began after he attempted to lower wages—resulted in 16 deaths and is regarded as one of the most notorious incidents in U.S. labor history. Afterward, he was shot three times and stabbed twice by an irate activist. He survived and made a full recovery.

THE STAT: Under Frick, Carnegie Steel became the largest steel company in the world, valued at $25 million.

12. Bob Allen

Bob 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. In 1997, after AT&T lost more than $12 billion in a few months, Time called the company a “monolithic screwup.”

THE STAT: To stem the company’s losses on his watch, Allen had to lay off 50,000 AT&T employees.

13. Roger Smith

The CEO’s job is often thankless, and no one was ever thanked less than Roger Smith, General Motors’ chairman from 1981 to 1990 and the unwitting stooge of Michael Moore’s mockumentary Roger and Me.

14. John Sculley

Sculley forced Steve Jobs out of Apple. Enough said. But let’s continue: Though he was 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 that flopped in the marketplace. (Remember the Apple Newton?) Sculley boosted the price of the Macintosh when personal computer prices were falling. The board ousted him in 1993, when Apple was slipping toward bankruptcy.

THE STAT: In 1987, Sculley was ­reported to be the highest-paid executive in Silicon Valley, earning a then-unheard-of $2.2 million.

15. Martin Sullivan

Get out your tomatoes. This is the guy who approved those “retention” bonuses that AIG tried to pay after sucking up nearly $200 billion from U.S. taxpayers. Sullivan was ousted before the bailout, but his inaction as CEO helped create AIG’s mess. He brushed off the firm’s subprime exposure as “manageable” while write-downs mounted and the firm recorded its two largest quarterly losses.

THE STAT: Sullivan’s severance package was $25.4 million, including $322,000 for private use of corporate aircraft.

16. Gerald Levin

Levin’s failure comes down to one colossal mistake:
In his desperate eagerness to become a new-media CEO, he orchestrated a megamerger with a vastly overvalued AOL—one of the worst acquisition deals ever. “He had the largest midlife crisis in the history of American capitalism,” one of our panelists quipped.

THE STAT: The AOL deal destroyed over $200 billion in shareholder value.

17. Bob Nardelli

Nardelli was fired from Home Depot after losing market share, alienating executives, downplaying customer service, and refusing to cut his fat pay package. He was then hired by the private equity group Cerberus, which put him in charge of its struggling Chrysler unit. There, he took billions in government aid, only to face an ultimatum: Merge or face certain liquidation.

THE STAT: Nardelli’s Home Depot exit package of $210 million was regarded as one of the largest ever.

18. Stan O’Neal

O’Neal’s abrasive personality and ruthless cost-cutting earned him many enemies, but his push toward riskier bets and subprime exposure led to his ouster. After Merrill posted the biggest quarterly loss in its 93-year history—and O’Neal was caught approaching Wachovia about a merger without the board’s approval—he was finally fired.

THE STAT: O’Neal walked out the door with $161.5 million in severance.

19. Carly Fiorina

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. She was ousted in 2005.

THE STAT: HP stock lost half its value during Fiorina’s tenure.

20. Vikram Pandit

Pandit didn’t create the mess Citi is in, but he is the financial-services equivalent of the Titanic’s Edward Smith—a commander ill-equipped to save his ship. When Pandit took over, Citi was already on track to report write-downs and increased credit costs of $20 billion. Today, the banking supermarket is propped up by $45 billion in bailouts and is, in effect, owned by the U.S. government.

THE STAT: Although Pandit’s currently earning $1 a year, his pay package was valued at $38.2 million for 2008, a year when taxpayers kept the firm in business.