Phony Accounts, Plummeting Fortunes And Bridgegate: The 12 Worst Career Crashes Of 2016
Karsten Strauss Forbes Staff
This year some high-profile leaders flamed out spectacularly, suffering major self-inflicted catastrophes after insidious decisions or foolhardy actions. To pick the most spectacular, we at FORBES scoured the year's news and conferred among our in-house experts. The resulting list of losers is presented alphabetically.
This past July, nearly 20 years after being named founding CEO of Fox News by its owner, media mogul Rupert Murdoch, and over a decade since assuming the chairmanship of Fox Television, Roger Ailes stepped down amidst allegations of sexual harassment, which he denied.
Ailes' tribulations began with a sexual harassment suit filed against him by former Fox anchor Gretchen Carlson, whose accusations included unwanted sexual advances and terminating her employment when he was rebuffed. The suit spurred an internal inquiry at Fox which unearthed more than 20 claims of inappropriate behavior against Ailes, who walked away from his post with a $40 million settlement.
Earlier this year, FORBES named Sophia Amoruso among the Richest Self-Made Women, valuing her fortune at $280 million, based on the value of her company, online fashion retailer Nasty Gal. With Nasty Gal's bankruptcy in November, Amoruso will likely see herself cut from that roster.
The lead up to the end seemed strong: years of fast growth and secured capital—$65 million worth between 2012 and early 2015. But despite some impressive revenue figures – $100 million in 2012 – the company was unable to hit profit targets fast enough to pay the bills or secure a buyer. Amoruso, who relinquished the CEO position last year, scored a New York Times bestseller in 2014, helms a popular podcast, and an upcoming Netflix comedy based on the entrepreneur is in the works, backed by actress Charlize Theron. Will that project be affected by Nasty Gal's demise? Let's wait and see.
To be sure, 2016 has been a very turbulent year for New Jersey Governor Chris Christie. He has had to face the stain of the conspiracy and fraud convictions of two underlings for their part in the so-called 2013 Bridgegate scandal (Christie denies wrongdoing and has not been charged).
Christie also spent a good deal of time and sweat this year running a failed campaign for president, after which he vehemently, if not obsequiously, supported the candidacy of Donald Trump. Despite that support, he has not been named to the president-elect's cabinet. Also, this year Christie's approval rating in the state he governs plummeted to abysmally low levels.
This past February, Parker Conrad stepped away from his CEO role at Zenefits, a three year-old company he co-founded which built free HR software for businesses and made money by taking a commission when customers bought health insurance through the platform.
He resigned amid revelations that under his supervision, employees were willfully flouting insurance regulations by cheating on online tests to obtain broker licenses. In a statement, Conrad said the "company's management infrastructure and policies haven't kept pace with our meteoric growth." At his high point Conrad was lauded for his company's fast growth and ability to secure heaps of investor capital—$500 million last year at a valuation of $4.5 billion. The renown turned to notoriety and Zenefits, in an unusual move slashed its own valuation by more than half, to $2 billion.
As the curtain closed on a corporate legal drama surrounding the leadership of media behemoth Viacom, Philippe Dauman found himself thrown out as CEO. Once a close friend to former Viacom and CBS chairman, Sumner Redstone, Dauman was blocked from succeeding Redstone by the billionaire's own daughter, Shari Redstone.
When Mr. Redstone distanced Dauman from greater influence, Dauman sued, asserting Ms. Redstone was pulling her father's strings. Initially supported by Viacom's board, Dauman's leadership was called into question after box office disappointments and faltering stock performance. Top employees threatened to jump ship. With his hold as CEO weakening, support faltering and a legal fight dragging Viacom through bad publicity, Dauman accepted a settlement stripping him of his board seat and chairman role. His severance package amounts to $72 million, which should act as a salve for his career crash.
Few CEOs climb high enough to fall as hard as Elizabeth Holmes. This summer FORBES estimated that Holmes's fortune – tied directly to the value of her company, Theranos – had dropped from $4.5 billion to zero. Holmes founded Theranos in 2003, and claimed to offer blood tests using less far blood than normally required.
In 2014 the company was valued at $9 billion. Last year, though, investigations into the company's testing capabilities suggested its testing results were not as accurate as claimed. Holmes, meanwhile, pushed back against the criticism. Earlier this year, the Centers for Medicare and Medicaid Services, which regulates Theranos, sent the company a warning regarding the effectiveness of its testing and sanctioned the company. Holmes accepted responsibility and vowed to rebuild its labs. As of October, the firm has shuttered its laboratory and shed 43% of its staff.
This past May, peer-to-peer lending company Lending Club announced the resignation of its CEO, Renaud Laplanche, who had co-founded the firm in 2006. An internal review that turned up a sale of $22 million in loans to a single investor, in violation of company policy and against the investor's "express instructions."
Lending Club also said that Laplanche had not notified company directors that he held a stake in a firm that Lending Club was contemplating investing in. At its peak in December of 2014, the company hit a market value of $10 billion. Stocks sank in the wake of Laplanche's exit. He acknowledged that, on his watch, the company's high standards were not met and said that "while there are disagreements as to the characterization of facts, I accept that the Board acted in good faith and did what it believed was right for the Company."
Known to many as Johnny Football, Heisman trophy winner Johnny Manziel came into pro football carrying a huge load of expectations. So far he's struggled to meet them and this year in particular has been a rough one for him. In the spring he was released from his contract with the Cleveland Browns.
He was also indicted this year after being accused of hitting and threatening a former girlfriend—accusations he denied. Earlier this month the charges were dismissed on the condition that the struggling athlete attend anger management courses and enter a substance abuse program. Treatment or no, for Manziel, finding his way back into the NFL – if that is indeed his wish – will likely require a dramatic change in attitude and lifestyle before team owners will be willing to take another chance on his potential.
After signing on as CEO with pharmaceutical company Valeant, Mike Pearson found renown buying obscure drug companies, cutting costs and increasing product prices. But last year Senator Bernie Sanders and Congressman Elijah Cummings cried foul over the company's steep price hikes.
More bad news arrived for the company when it was discovered Valeant had encouraged prescriptions for its drugs filled by mail order pharmacy Philidor—a company with which it was accused of having a questionable business relationship. Stock values began to tumble and, after several months recuperating from a severe case of pneumonia, Pearson was fired by the Valeant board in May and left with a $9 million severance package.
As chairman of Saatchi & Saatchi, a 46 year-old advertising firm with a global footprint, Kevin Roberts must have understood a thing or two about optics. Which is why it may not have come as too much of a surprise to him that his bosses were unhappy enough with his comments on gender equality to fire him over them.
Roberts, in an interview with Business Insider this summer, claimed there was no longer a debate about gender diversity in the advertising industry and that he did not spend time on gender issues and suggested that women were happier in non-leadership roles. Though he later apologized, in his miscommunication he torched a career with a communications company that had been his home for nearly 20 years.
Driven, bright and armed with an ivy-league pedigree – undergrad at Stanford followed by a Harvard MBA – Mike Rothenberg jumped into the Silicon Valley venture capital scene in 2012, launching his own firm, Rothenberg Ventures on $5 million he raised from friends and family. He bet on startups and virtual reality tech.
Later, reports of lavish spending on perks and celebrity-attended events began to emerge. Recently, the firm, according to sources, became the focus of an SEC investigation into deceptive financial practices, and Rothenberg himself is allegedly being investigated for questionable money wire transfers. The firm dropped Rothenberg's name in September and is now known as Frontier Technology Venture Capital. It had been hemorrhaging talent, according to a report by TechCrunch. Rothenberg declared he would resign at the end of August but has not done so and remains the firm's CEO.
John Stumpf was a company man. He spent 34 years with Wells Fargo bank – his final nine as its CEO – and his time with the organization, and his career, came to a close this October shamefully and publicly.
This year Wells Fargo consented to a $185 million fine after being sued in 2015 by the city of Los Angeles for, among other questionable practices, secretly opening unauthorized customer accounts that then accrued bogus fees, including 1,534,280 unauthorized deposit accounts and 565,443 unauthorized credit card account applications between 2011 and 2016, according to the Consumer Financial Protection Bureau. The practice – the product of intense pressure on bank employees to meet sales quotas – had all taken place on Stumpf's watch.
Stumpf, who accepted full responsibility for the debacle and said he was "deeply sorry," left Wells Fargo a month after testifying before the Senate Committee on Banking, Housing and Urban Affairs. He received no severance package but will be entitled to $24 million from a supplemental cash balance plan six months after his official retirement.
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Karsten Strauss
I am a New York City-based journalist and staff writer for Forbes Magazine and Forbes.com covering entrepreneurship and franchising. I'm interested in how individuals in...