How Do These CEOs Keep Their Jobs?

Last Updated Nov 10, 2008 4:17 PM EST

The number one job of a board of directors is essentially to hire and fire the CEO. If shareholders held boards accountable for just that, corporate performance would improve.

Of course, the decision should never be a rash one, but I think boards often err on the side of caution by keeping ineffective CEOs around too long. There are lots of reasons, but that's for another post.

Here are nine CEOs that, in my opinion, should be shown the door. That assessment is based on strategic decisions (or lack thereof), operating performance, and share price.

Note that most of these companies are or should be turnarounds. And although a few of their CEOs haven't been at it for long, I think boards should be relatively aggressive when much-needed change isn't happening. But that's just me.

  1. Jerry Yang, Yahoo. Yahoo needs a turnaround specialist, not a chief Yahoo. For a visionary, Yang has made little or no progress on Yahoo's strategy. He did, however, blow the Microsoft bailout and lost 100+ key executives. And the slide continues.
  2. John Mackey, Whole Foods. The creepy, ethically-borderline Yahoo Finance message board pseudonym thing should have been enough, but the Wild Oats acquisition and the stock's 3-year free-fall is enough. It's time for a change.
  3. Jonathan Schwartz, Sun. Schwartz has failed to make any meaningful changes to Sun's expensive, vertically-integrated business model. Profits remain elusive and Sun's already depressed share price has declined another 75% since he took office.
  4. Mike Zafirovski, Nortel. The man credited with remaking Moto's handset business appears to be ineffective at Nortel. Since taking over in November of 2005, operating performance has shown little improvement and the stock is down over 95%.
  5. Jure Sola, Sanmina-SCI. Struggling with profitability, flat revenues, share price at an all-time low, and an industry-wide slowdown, it's time for founder Sola to bow out and give somebody else a chance.
  6. Dan Hesse, Sprint. Predecessor Gary Forsee screwed up the Nextel merger and Sprint's been hemorrhaging ever since. Unfortunately, Hesse hasn't managed to stop the bleeding as customers flee, losses mount, and the share price nears an all-time low.
  7. Steve Tirado, Silicon Image. The stock is down 75% since Tirado took office almost 4 years ago. Good technology and customer adoption is overshadowed by poor operations management. Unfortunately, the current board is stacked with tech insiders.
  8. Steve Laub, Atmel. Laub has had more than two years to turn Atmel around after the board booted founder George Perlegos in August of 2006. But few if any material changes are in evidence. I think the board should pull the plug. As an aside, Laub preceded Tirado at Silicon Image. Small world.
  9. John Bourgoin, MIPS. With shares near a five-year low, this is another good technology company with consistently-poor operations management. Bourgoin, who helped engineer the MIPS spin-off from Silicon Graphics, has taken MIPS as far as he can.
In the past year or so, Alcatel Lucent, AMD, Blockbuster, Cadence, Conexant, Dell, Ford, JDS Uniphase, Motorola, and Vonage have all made changes at the top, hopefully for the better.

It makes you wonder what the boards of the nine companies I cited are waiting for. Any ideas? Any CEOs I missed?