The 5 Worst CEOs of 2016

worst CEOsA good CEO can become a business icon - someone who leads a company to dominate an industry and becomes synonymous with success.

Like Steve Jobs. He understood his customers - some would say better than they even understood themselves - mastered market dynamics, and was committed to excellence and brutal rejection of "good enough," and accountable when things went wrong. This made him the quintessential CEO.

Then we have the worst CEOs, like Ken Lay. During his time as CEO of Enron, Lay signed off on a mess of convoluted transactions that formed the basis of a massive accounting fraud that would wipe out investors and bring down the corporation. This landed him at No. 3 on CNBC's "Worst American CEOs of All Time."

We have found five CEOs that make the top five for 2016 - and maybe some on the all-time worst list. Here they are...

Worst CEOs of 2016, No. 5

 Shigehisa Takada - Takata Corp. (TYO: 7312)

Takata Corp. is one of the world's largest suppliers of auto safety equipment. And for the longest time, its airbags set the industry standard.

But starting in 2008 and all the way through Dec. 9, 2016, 14 automakers were affected by severe problems with Takata's airbags. According to the National Highway Traffic and Safety Administration, any Takata airbag inflator made between 2000 and 2007 was improperly welded, causing it to send metal shrapnel into the car's cabin upon airbag deployment.

In total, between 2008 and 2016, the airbags have been linked to 11 U.S. deaths and more than 100 injuries, and a recall of more than 60 million vehicles in the United States alone.

Takada, the CEO, was responsible for the day-to-day operations starting in 2014, the year the problems escalated. During the heat of the recalls, his leadership was allegedly nonexistent. He stayed largely in the background as the company's reputation and cash reserves plummeted, leaving his subordinates to explain the company's response to regulators, governments, and the media.

It wasn't until June 25, 2015, nearly a year after the recalls had been in full swing, that Takada publically addressed the issue and offered an apology. But he stuck to his beliefs that his company's airbags are safe, despite the harm they caused.

Worst CEOs of 2016, No. 4

 Marissa Mayer - Yahoo! Inc. (Nasdaq: YHOO)

On July 16, 2012, Yahoo hired Marissa Mayer to pull the company out of what many saw as a death spiral.

Mayer was faced with a big decision almost immediately after becoming CEO, and that was what to do with Yahoo's massive stake in Alibaba Group Holding Ltd. (NYSE: BABA) and Yahoo Japan. Her original plan to sell off the stock in both Alibaba and Yahoo Japan in order to finance Yahoo's core operations (search, advertising, and news verticals) was shut down by the IRS, as it determined that would be a massive tax liability.

That meant the only other way for Mayer and shareholders to get the value that lies in Alibaba and Yahoo Japan was to sell Yahoo's core assets.

After rounds of bidding, Mayer finally did something for shareholders to cheer about.

In July 2016, Mayer accepted Verizon's offer to acquire Yahoo for $4.8 billion -- that was until Yahoo's most recent news...

On Dec. 14, 2016, Yahoo said it uncovered a 2013 cyberattack that compromised data of more than 1 billion user accounts, the largest known breach on record. The announcement followed Yahoo's disclosure in September 2016 of a separate breach that affected over 500 million accounts.

Since then, there is a Federal Bureau of Investigation probe into the breach and various class-action lawsuits by shareholders. Now Verizon, which agreed to buy Yahoo's core Internet business in July 2016 for $4.8 billion, is trying to persuade Yahoo to change the terms of the acquisition agreement to reflect financial damage from the two separate hacks - even threatening to go to court to get out of the deal if it is not repriced.

Mayer has yet to comment on the breach and the standing of the Verizon deal. This has caused some, like Greg Sterling, a contributing editor to Search Engine Land, to say, "Whatever happens, she'll be seen as the CEO who tried and failed to revive the core business and sold the company."

Worst CEOs of 2016, No. 3

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 Michael Pearson - Valeant Pharmaceuticals International Inc. (NYSE: VRX)

The former Valeant Pharmaceuticals CEO has been largely criticized for two of the company's biggest problems: price gouging and debt financing.

Pearson oversaw Valeant's acquisition of niche drug companies. On Feb. 10, 2015, Valeant purchased two lifesaving heart drugs, Nitropress and Isuprel, and hiked their prices by 525% and 212%, respectively. Valeant did this on the same day the deal to acquire the company was made. And on Sept. 20, 2015, The New York Times mentioned these price hikes in an article, which caught the eye of government regulators.

By Aug. 11, 2016, it was reported that Pearson was being investigated by both the House and Senate, and receiving subpoenas from the U.S. Attorney's Office.

Also getting heat was Valeant's merger and acquisition growth, which Pearson spearheaded. Valeant got money through lenders that were more than willing to loan to Valeant since interest rates were so low at the time. Valeant bought more than 100 companies with all its borrowed money, including Bausch & Lomb for $8.7 billion.

However, this strategy came to a halt in February 2016. Valeant announced then that it had overstated $58 million in sales from its pharmacy, Philidor Rx Services, so it could look more appealing to investors. This caused Valeant to go $30.66 billion in debt and sell off billions of dollars it had in non-core assets.

Valeant in March 2016 announced Pearson was leaving, which he did the next month. In October 2016, it was announced that Pearson was part of the focus of an investigation into possible accounting fraud at Valeant.

Valeant shares have lost 85% year to date (YTD), and they are down about 93% from their all-time high set on Aug. 5, 2015, when the stock closed at $262.52 per share.

 Worst CEOs of 2016, No. 2

John Stumpf - Wells Fargo & Co. (NYSE: WFC)

In 2013, Wells Fargo CEO John Stumpf was named "Banker of the Year" and Morningstar's 2015 "CEO of the Year." He's been counted as one of the world's most influential executives - until this year...

In September 2016, the Consumer Financial Protection Bureau slapped the bank with a $186 million fine for "widespread illegal" sales practices. Approximately 5,000 former employees opened up about 2 million fake accounts without customer consent in order to meet sales goals, according to federal and local authorities.

The employees in large part blamed the institution. They said those who didn't go along with the plan to open up the fraudulent accounts were fired on the basis they were not preforming their job correctly.

Stumpf, as CEO at the time, was aware and accountable for his employee's behavior, which occurred over a five-year period.

He was confronted by Sen. Elizabeth Warren at a Sept. 20, 2016, hearing. Warren said, "You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your pocket."

Stumpf failed to take responsibility for the company's action, noting he and other senior bank leaders weren't aware of the problem. Stumpf was quoted by CNBC on Sept. 14, 2016, saying that he wouldn't step down. "I think the best thing I could do right now is lead this company, and lead this company forward," he said.

Since that statement, Well Fargo announced Oct. 12 that Stumpf was retiring effective immediately. He walked away with about $133.1 million in compensation.

Worst CEOs of 2016, No. 1

Elizabeth Holmes - Theranos

In 2003, Elizabeth Holmes emerged on the tech scene with her blood-testing company, Theranos. Holmes was only 19 and a Stanford dropout.

Theranos was supposed to be different from other testing companies. Holmes claimed it was able to get large amounts of data from just one finger prick - instead of multiple blood draws, like with typical blood tests.

However, the technology the company used to gather the data from the blood samples was criticized by many for being nonexistent.

And at the time, no one knew anything about the company's technology because Holmes only took money from investors on the condition that she would not tell investors how her technology actually worked, according to Vanity Fair.

But one healthcare reporter from The Wall Street Journal, John Carreyrou, was especially suspicious of Holmes' tech because of a vague answer she gave to a reporter from The New Yorker when asked how it worked. Her response: "A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel."

Turns out the reporter's skepticism was warranted. On Aug. 25, 2015, investigators from the Federal Drug Administration and the Centers of Medicare and Medicaid (CMS) began to inspect Theranos' facilities.

CMS regulators found major discrepancies in the testing procedures being done on patients. According to Vanity Fair, some of the tests Theranos was performing were so poorly administered they could leave patients at risk of internal bleeding, or of stroke among those prone to blood clots.

Walgreens has since severed its relationship with Holmes and closed the Theranos-tied Wellness Centers. The Federal Drug Administration banned the company from using its testing device, Edison. The CMS banned Holmes from owning or running a medical laboratory for two years.

And then came civil and criminal investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney's Office, and two class-action fraud lawsuits.

In response, Holmes somehow still wholeheartedly believes her technology works. In a CNN report, she said, "We didn't have the right leadership in the laboratory, and we didn't have the implantation of the quality system in terms of procedures."

Up Next: These Failing Companies Will Finally Disappear in 2017

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