Buzz
Everyone has experienced that moment when they observe an abstract painting by a renowned artist and think, 'I could do that! Why am I not earning millions?' Interestingly, the same thought can be sparked by witnessing how some executives manage their companies. Thanks to the magic of 'golden parachutes' (enormous severance packages), nearly anyone can take charge of a company, mess it up beyond recognition, and still walk away a millionaire.
10. Gary Forsee
Anyone who deals with customers regularly dreams of telling them off, but usually it's the need to eat that holds them back. However, Gary Forsee, the CEO of Sprint, had no such worry. With enough money to live off of, he could have dined on a different endangered species every day for the rest of his life.
After his disastrous management of the Sprint-Nextel merger, which resulted in a $30 billion loss for the company, Gary Forsee began either cutting corners on service quality or disregarding it completely. His customers were far from pleased with this, and when Sprint received a flood of complaints, Forsee's solution was to suddenly cancel the contracts of over 1,000 angry paying customers. Millions more, dissatisfied with being treated poorly, left for other companies. Frustrated with his continuous missteps, the board decided to terminate Forsee's position, but not without a parting gift: $1 million, plus $85,000 per month for life, on top of the $40 million he earned in salary and bonuses that year, all while thousands of Sprint employees lost their jobs due to Forsee's blunders.
9. George Shaheen
In 1999, George Shaheen took the helm at Webvan, an internet startup promising to deliver groceries to your doorstep in under 30 minutes. Earning $500,000 a year, along with a potential fortune from his company stake, he was set to profit handsomely—if only he hadn’t been terrible at the job. In just 18 months, Webvan burned through $1.2 billion of investor funds, leaving nothing but delayed deliveries, missing items, and confused employees. Less than a year after Shaheen's leadership began, Webvan was bankrupt. As he left the company, immediately after driving it to the ground, Shaheen walked away with a severance package of $375,000 per year for life.
That's right. His reward for utterly failing was an annual payment worth a small fortune, in addition to the $1.5 million he earned during his 'tenure' at Webvan. The term 'work' is used loosely here, as Shaheen was criticized for lacking experience in the internet industry and for being aloof and disconnected. Shaheen himself said, “I’m proud of my contributions, and I came in and worked hard on a business model that was difficult to execute.” Well, good for you, buddy. Only in the world of CEOs can a huge failure and a sincere attempt be rewarded with millions.
8. Robert Nardelli
While Shaheen’s payout might seem generous, it’s nothing compared to what Robert Nardelli, the former CEO of Home Depot, received when he left the company. To be blunt: $210 million. That’s how much he was handed after being fired. On top of that, his salary and bonuses during his five years in charge totaled more than $65 million, far exceeding what anyone else associated with the company made.
But the real question is, was he worth it? Of course not. He wouldn't be on this list if he were. Nardelli pocketed a Scrooge McDuck-sized fortune for getting outdone by competitors in the home improvement sector. He seemed to produce short-term results, but problems were always lurking beneath: net profits rose, but only because he fired thousands and slashed customer service—something home improvement stores should never, ever do. When the guy selling us a Phillips Head Screwdriver is as clueless as we are, things aren’t going to go well. Nardelli’s main achievement was losing business to his rivals. It’s no surprise that, during his leadership, Home Depot's stock dropped by 8% while Lowe’s stock soared by 180%.
7. Ron Johnson
Ron Johnson served as CEO of the struggling JC Penney department store chain for just 18 months before being fired and receiving a $53.3 million severance package—ironically losing his job to the person he had been hired to replace. His tenure was an expensive and futile endeavor. Both he and the person who hired him deserve equal blame. The problem was that JC Penney was losing customers, mainly because their main demographic was older, and older people, unfortunately, tend to pass away. So, they decided the best person to revamp the store was Johnson, the genius behind Apple’s hugely successful retail stores. And who doesn't know how well Apple stores cater to the elderly?
He quickly rolled out several poorly thought-out ideas that completely disregarded what most customers actually wanted, like offering free haircuts for kids who never shop there and eliminating coupons (which, if he had done any research, he would’ve known were a favorite of the store’s regulars). The biggest red flag came when Johnson insisted that these changes be implemented nationwide, immediately. No testing in a few select stores, no time to gauge customer reaction—just a full-scale roll-out. When asked if he was out of his mind, he responded by boasting that Apple never tested their ideas either, showing that he couldn’t differentiate between a tech store aimed at young people and a department store for older generations, most of whom have probably already traded in their original hips. After he was fired, his replacement promptly reversed all of Johnson's changes and ran ads apologizing for the blunder. Not that Johnson cared—he was more than satisfied with the $50 million he earned for just a few months of work.
6. Brian Driscoll
At least most of these guys actually made an attempt to do their jobs—Hostess CEO Brian Driscoll, however, simply gave up and pocketed as much money as he could before the company went under. Faced with a shrinking profit as people started paying attention to their waistlines and cut back on their daily consumption of Hostess snacks, he realized it was time for a bold move. So, he racked his brain, dug deep into his creativity, and came up with... banana cream-flavored Twinkies. When that flop was followed by a worker strike, he decided it was time to bail.
By this point, Hostess was on the brink of bankruptcy. Employees across the company were losing both their jobs and their pensions. To congratulate himself on his stellar work, Driscoll more than tripled his own salary to $2.5 million, and generously handed out large raises to a few other executives, just because. Confident in a job well done, Driscoll took his millions and walked out, leaving behind a cruel farewell to all the suddenly unemployed and pension-less workers who had helped him get rich.
5. Brian Dunn
One of the first rules in management is to avoid having a romantic relationship with an employee. Especially if that employee is about half your age. Apparently, this subtle advice flew right over the head of Best Buy CEO Brian Dunn.
To be fair, both he and his younger colleague claimed their relationship was purely platonic, and there's no concrete evidence of an affair. However, there were those little details like him showering her with expensive gifts, the two of them going on lavish vacations together, and talking and texting each other constantly. But hey, that totally sounds platonic, right? It was this so-called 'friendship' that ultimately cost Dunn his position. Fortunately, he walked away with a $6.6 million payout as a consolation prize. But realistically, his time at Best Buy was probably nearing its end anyway. The company was, and still is, falling behind its competitors, and Dunn didn’t do much to try to turn it around—except securing exclusive rights to a few lackluster 3-D DVDs, which paired nicely with the equally uninspiring 3-D TVs. Maybe he was just too busy making 'friends.'
4. Eddie Lampert
Imagine being handed the reins of a multi-billion-dollar retail empire with locations all over the globe. What would your first move be? Some might take a methodical approach, learning as much as possible. Others might opt for rapid expansion. Eddie Lampert, CEO of Sears/K-Mart, took a different route—he chose to break it into multiple warring factions and sever their supply chains, forcing them to battle for diminishing resources. Lampert claims this was to expose weaknesses and allow the strongest to thrive. In reality, it led to petty squabbles between divisions, with departments fighting over floor space like it was a Game of Thrones-style turf war.
An additional downside to Lampert’s reckless strategy was that every newly formed division now required its own board of directors and a new set of executives, all of whom demanded hefty salaries. This meant that all the high-level employees who were once focused on decision-making and getting things done now found themselves spending most of their time in endless meetings just trying to make sense of the chaos. And Lampert’s personal reward for wrecking the company from within? A symbolic $1 salary, followed by a few million in bonuses on top.
3. Jodee Rich and Brad Keeling
It’s one thing to make millions by getting fired, but it’s an entirely different feat to make millions by being foolish enough to start a business that was practically doomed from the get-go. That’s exactly what Jodee Rich and Brad Keeling did when they founded OneTel, a brief and ultimately failed Australian phone company in the late ’90s. Their business strategy involved buying mobile bandwidth from other providers and selling it to customers at a loss—meaning they lost money on every customer they acquired. On top of that, they managed to make one mistake after another. Rich, for example, decided to replace all the computers in their data centers with flat screen monitors for “feng-shui purposes” at a time when flat screens were still rare, expensive, and entirely unnecessary. The company would often lose track of customers and forget to bill them, and that was just the beginning—there were numerous accusations of fraud, insider trading, and sketchy accounting.
Despite these blunders, things seemed to be going well for OneTel—for a while. This was mostly because Rich and Keeling were the offspring of media magnates Rupert Murdoch and Kerry Packer. With these powerful connections, they convinced their friends to invest a hefty chunk of their wealthy fathers’ money into OneTel. As soon as it became known that both Murdoch and Packer had invested big, other people started to think it was a safe bet, so they jumped on the bandwagon too—completely unaware that the company was burning through cash faster than it could bring it in. But this didn’t stop Rich and Keeling from patting themselves on the back for their success, rewarding themselves with millions in bonuses every year, including around $7 million each in the years when OneTel had record losses. Everything came to a crashing halt when Rupert Murdoch and Kerry Packer finally intervened, told their children to stop wasting money on a failing business, and pulled their financial support. Without these influential backers, OneTel collapsed almost immediately. A few lawsuits and settlements later, Rich and Keeling still walked away with millions, while every other investor lost everything. So, dream big, make poor decisions, and be born into a family that renders ethics and hard work irrelevant, and you too can become a multi-millionaire.
2. Ed Zander
Ed Zander served as the CEO of Motorola from 2004 to 2008. When he took charge, he implemented changes, concentrated on the company’s core strengths, and worked on improving accountability, among other things. Under his leadership, Motorola released the wildly successful Razr phone, which sold over 50 million units and made a ton of money. After this achievement, Zander thought he had done enough, so he pretty much stopped trying. Unfortunately, he was wrong. Just a few years later, the Razr was hopelessly outdated, and competitors were introducing newer, better phones. Zander's brilliant idea was to drop the price of the Razr. For this masterstroke, he pocketed yet another small fortune. Shortly after, Apple launched the iPhone, and other competitors had their own new models waiting in the wings.
But Motorola? It still had the same old Razr. Zander, ever the visionary, decided to release the same phone in different colors. For this burst of creativity, he earned himself another few million dollars. However, people weren’t exactly lining up to buy a subpar phone just because it was available in hot pink, and Motorola soon found itself hemorrhaging billions. Having exhausted both his color options and his creativity, Zander spent his days looking busy—sharpening pencils and twiddling his thumbs. Eventually, the board of directors grew tired of paying him huge sums of money for doing nothing, and when they didn’t like his explanation, they decided to fire him. But not before handing him a final parting gift of millions of dollars.
1. Eckhard Pfeiffer
It may seem hard to believe now, but there was once a time after the creation of the personal computer but before the advent of the Internet. It was an era when many computer companies floated along, riding the technological waves on the backs of metaphorical turtles of progress (or something like that). One such company was Compaq, which is now slowly fading into obscurity, largely due to the mismanagement of its former CEO, Eckhard Pfeiffer.
Pfeiffer was notorious for being distant and completely out of touch, keeping himself surrounded by a small group of executives and barely interacting with anyone else. Even when things were clearly going south, he refused to even entertain the idea of finding a successor, likely because he didn’t want to imagine a world in which he wasn’t pocketing $4.5 million a year for doing nothing. But his biggest blunder was dismissing the Internet as a passing trend, even as every other tech company embraced it. Eventually, Compaq’s board had no choice but to let Pfeiffer go for his disastrous leadership. Despite his appalling performance, he still managed to walk away with nearly $10 million in severance and hundreds of millions in shares. And now, you can read about it all on the very Internet he once thought was “never going to amount to anything.”
