BUSINESS

The biggest CEO firings of 2008

By Matthew Kirdahy, Forbes.com
December 30, 2008 13:14 IST

The bloodletting in the c-suite started in 2007. It still hasn't stopped.

Another year goes by and more chief executives get the ax--probably more than in any previous year. People shook their heads when Charles Prince III at Citigroup and Stanley O'Neal at Merrill Lynch got the boot in 2007. Now it look like they were lucky. They got out just in time.

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  • Martin Sullivan of American International Group (let go in June), Kerry Killinger at Washington Mutual (September) and Richard Fuld of Lehman Brothers (leaving next month) are among the biggest names to be shown the door as a result of the economic crisis.

    Their distinguished company includes James Cayne of the now-deceased Bear Stearns and Richard Syron and Daniel Mudd, the former CEOs of the mortgage buyers Freddie Mac and Fannie Mae.

    "There are two kinds of CEO firings," says Noel Tichy, a professor at the Ross School of Business at the University of Michigan. "There are the crooks and there are the incompetents." This year the biggest departing names all fell into a gray area in between.

    None was as corrupt as the executives embroiled in the infamous Enron and Tyco scandals of a decade ago, but you couldn't just say they were simply stupid either.

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  • CEOs in the financial services industry discovered that they had allowed their companies to take suicidal risks with other people's money based on bad or staggeringly incomplete information. Many of them have paid with their jobs.

    Despite their prominence, these headline names compose just a small fraction of the 1,361 U.S. CEOs who left their jobs this year through November. That's up from 1,356 in all 12 months of last year.

    The final 2008 number may prove to be a record, beating the previous one of 1,478 set in 2006, according to data collected by the management consulting firm Challenger, Gray & Christmas.

    What will 2009 hold? Mark Hodak, compensation consultant for Hodak Value Advisors in New York City, compares the current business environment to a sick patient with a fatal fever.

    "If we continue with the strains that we're dealing with now, we're going to have more departures," he says. "People have no idea how bad it can really get. There's a lot of strain on a lot of companies right now."

    Three names stand out ahead of all others for likely rolling next year: Rick Wagoner of GM, Alan Mulally of Ford and Robert Nardelli of Chrysler. But that's assuming their companies can even last long enough for them to get fired.

    Matthew Kirdahy, Forbes.com
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