Bad Bosses: How Inept Execs Got Away With Mismanagement and Scandal In 2012
By AOL Jobs Dec 11, 2012 11:10 am
A look at the corporate leaders who got fat bonuses stapled to their pink slips.
The debate about whether US laws governing corporate governance are too lax or not is likely to go on, especially in light of these recent examples of company executives who oversaw scandals and didn't pay the price:
- BP America (NYSE:BP) President Lamar McKay, Managing Director Robert Dudley and CEO Tony Hayward, BP PLC: Of these three, only Hayward lost his job after the 2010 oil spill that dumped 200 millions gallons of crude into the Gulf of Mexico. Often held up as the villain in the disaster, Hayward famously said, "I'd like my life back," while rescue teams struggled to clean up tar balls on the Gulf Coast. As the New York Times notes, two years on, Hayward does indeed have his life back, seeking to strike riches in the oil fields of northern Iraq. In February, BP awarded Hayward shares valued at more than $1.11 million under a three-year incentive plan that ended in 2011, the Wall Street Journal reported in March, even though he left BP before the plan's conclusion. As for McKay and Dudley, both are still employed at BP. The company recently announced that McKay will leave his US-based post and move to London where he will serve as chief executive of BP's upstream business. He'll report to Dudley, whose earnings of $2.6 million in 2011 included an $850,000 bonus.
- Mike Duke, Wal-Mart Stores Inc. (NYSE:WMT): Now the current CEO of the world's largest retail chain, Duke was head of Wal-Mart's International division in 2005, when an internal investigation reportedly revealed that the company's Mexico division was paying millions of dollars in bribes to speed expansion in the country. An investigative report by the New York Times published earlier this year alleged that Duke had detailed information about the bribery investigation, and presumably signed off on the company's decision to drop it. What's more, the report charged, Duke and other Wal-Mart officials failed for years to tell shareholders and government regulators about the potentially damaging information. Wal-mart paid Duke $18.1 million last year, including $1.3 million in base salary.
- Brian Dunn, Best Buy Co. (NYSE:BBY): As CEO, Dunn engaged in "an extremely close personal relationship with a female employee that negatively impacted the work environment," according to an internal audit. The investigation showed, for example, the 51-year-old Dunn contacted the younger employee at least 224 times by cellphone during two trips abroad in 2011. Despite his failings, Dunn walked away with compensation valued at $6.6 million shortly after stepping down in April, according to Forbes. The fate of the unnamed employee, who worked in human resources, isn't known. The company declined to comment about her employment status or to detail her exact duties, reported the Wall Street Journal.
- Scott Thompson, Yahoo Inc. (NASDAQ:YHOO): Thompson resigned his CEO post at Yahoo in May after just five months on the job when evidence obtained by the Internet company's board of directors revealed that the former PayPal president didn't have the degree in computer science that he claimed to have. During his brief tenure at Yahoo, he cut 2,000 jobs. Thompson, who told directors and colleagues that he was undergoing treatment for thyroid cancer, as the scandal unraveled, was granted no severance as part of his departure. But unlike the millions of Americans who've endured many months or years of unemployment, Thompson within weeks landed a job as CEO of ShopRunner, an Internet shopping service, despite his fabricated credentials. ShopRunner, a two-year-old startup, is privately held and so isn't required to disclose executives' salaries.
- Robert Diamond, Barclays PLC (NYSE:BCS): Diamond presided over the UK banking giant during a period in which it was alleged that the bank manipulated interest rates during the 2008 financial crisis. The now 61-year-old Diamond tried to hang on as news of the scandal spread, going so far as to issue a written apology to employees, seeking to assure them that as CEO he would get to the bottom of the matter. But under pressure by regulators and British Prime Minister David Cameron, Diamond eventually resigned -- and even forfeited his once-anticipated $30 million severance package. As reported by CNBC in July, Diamond didn't walk away penniless, however. Barclay's chairman, Marcus Agius, who was the first bank executive to resign but was forced to stay on after Diamond's departure, told lawmakers then that Diamond would receive a year's pay and a cash payment -- at a sum of 2 million pounds (about $3.2 million) -- instead of a pension. In accepting the much-reduced amount, Diamond said that he hoped his decision would "help close this chapter and allow Barclays to move forward and prosper.
No positions in stocks mentioned.