My praise and contempt for CEO actions is pretty well known around these parts. I've been running a weekly series looking at CEO gaffes for nearly nine months now (with seemingly endless material, may I add), and recently I've begun highlighting incredible CEOs who deserve a pat on the back. Last year I even listed my top 10 CEOs of the year and my 10 worst CEOs of the year.

However, this year we're changing things up a bit, and we're putting the ball in your court! This year The Motley Fool community is going to decide who the best CEO of the year is, and which CEO should be banished to a distant island.

Each week over the next seven weeks, I'm going to highlight one CEO who's worthy of being called the best CEO of 2012, as well as a CEO who could easily be called the worst of 2012. In total, you and your community members will have eight great CEOs and eight terrible ones to choose from when voting commences in November.

In the meantime, I encourage you to get the discussion started on the CEO of the Week board. Although I do have all the nominees hand-picked already, these selections are by no means set in stone. If you can offer me your top picks for best and worst CEO, as well as your reasoning, you may just find your nomination in the spotlight.

Without further ado, I give you the second nominee for worst CEO of the year: Mark Pincus, CEO of Zynga (ZNGA).

Why Mark Pincus?

  • An executive exodus: First and foremost, we can't talk about Zynga without first questioning the reason why eight high-ranking executives have left the company since the beginning of the year. Some speculate that a drop in Zynga's stock could be part of it, as executives are commonly compensated in stock options, but it could also have a lot to do with the fact that many privately held companies are growing faster and offering better long-term business potential than Zynga. Either way, it's worth noting that many departing execs are still receiving severance packages equal to three months of pay, so don't feel sorry for them.
  • A slowing growth rate: For a rapidly growing social media gaming company, things sure have come to a grinding halt lately. Zynga is reliant on Facebook (META 0.43%) for close to 90% of its revenue. In Zynga's second quarter, it blamed Facebook's platform change as one of the reasons users had a harder time finding its newer games. That blame, though, can't mask a growth rate that has gone from regular year-over-year doubles to just 19% in the second-quarter – and that was with the help of acquisitions! Even worse, despite a monthly unique user increase of 27%, average daily bookings fell 10%! In English, this means that despite the addition of 41 million more users than last year, even fewer people are paying customers than before!
  • A questionable acquisition: Perhaps nothing seemed dumber to my Foolish colleague Rick Munarriz than Zynga's purchase of privately held OMGPOP for $200 million. The maker of Draw Something garnered something like four times revenue with the buyout, a relatively high figure considering the average peak sales lifespan of most gaming apps is usually a year or less. The ascent of Draw Something to the 15 million user mark was impressive, but what does it matter if Zynga could have just made a knock-off game to cannibalize the sector? Zynga's penchant for "assimilate or we'll copy you" isn't the same thing as innovation, and investors are beginning to realize that.
  • Poor stock performance: A low barrier to entry, increased competition, and declining growth rates kept investors decisively away from Zynga's farm in 2012. Shares are down 70%, and the lack of paying customers and rising expenses aren't helping things one iota. For a while now, Electronic Arts' (EA 0.46%) vice president Jeff Brown has been predicting that next-generation game development costs could rise by 200%. His words couldn't be truer based on the recent results of app maker Glu Mobile (GLUU), gaming behemoth Activision Blizzard (NASDAQ: ATVI), and Zynga, whose constant need to develop shot research and development costs up 86%, 31%, and 79%, respectively.
  • Potential insider trading implications: If a 70% stock loss doesn't convince you that Mark Pincus deserves the title of Worst CEO of the Year, then perhaps allegations of insider trading will. Pincus and many executives took the opportunity to unload their shares by the barrel-full when the lock-up period expired on Zynga's stock in late May. All told, 43 million shares -- more than $500 million -- were sold, of which 16 million were from Mark Pincus. That alone should have been a warning to shareholders. But what's truly odd about the sale was the executives chose to sell out their stake as a secondary offering so that their stock sale wouldn't sink the share price. It also came just weeks before the company's second-quarter report, which cratered the stock. It should be noted, though, the investigation is ongoing and no guilty verdicts have been rendered at this point.

Is Mark Pincus the worst CEO of the year? That's going to be up to you and the rest of The Motley Fool community to decide. In the meantime, come back on Tuesdays and Thursdays for the next seven weeks for the latest nominations, and be sure to hit up the CEO of the Week board to voice your opinion to the community.

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