My praise and contempt for CEO actions are pretty well known around these parts. I've been running a weekly series looking at CEO gaffes for nearly 10 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 10 best CEOs of the year and my 10 worst CEOs of the year.

However, this year, we're changing things up a bit, and 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 three 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 I think could easily be called the worst. In total, you and your community members will have eight great CEOs and eight terrible ones to choose from when voting commences in November. For reference, here is last week's worst CEO nominee.

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 handpicked 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 sixth nominee for worst CEO of the year: Trudy Sullivan, former CEO of the now-private clothing retailer Talbots.

Why Trudy Sullivan?

  • Consistently bought the wrong product: To say that former Talbots CEO Trudy Sullivan didn't understand her customers or her shareholders might be the understatement of the year. Talbots struggled almost from the moment she took the helm and produced only one, very small, annual profit under her leadership. Since 2007, Talbots orchestrated the purchase of J. Jill Group only to jettison the retailer two years later due to a lack of cash and an inability to understand its core customer, and watched J. Jill-excluded sales slump 36%. Sullivan tried on multiple occasions to close stores, bring in new merchandise, and remodel its stores to cater to mature women, but it continued to lose its core customer to rivals Chico's (NYSE:CHS), Ann (NYSE: ANN), Macy's (NYSE:M) and Nordstrom (NYSE:JWN). Bigger chains like Macy's and Nordstrom have relied on loyalty rewards and Internet promotions to lure customers, while Chico's and Ann have returned to the basics of listening to their customers to understand their wants and needs, and reducing their discounting to keep margins up. This formula isn't rocket science, but Sullivan never quite got it.
  • George Costanza economics: Perhaps the most mind-boggling, sitcom-like moment of Sullivan's tenure as Talbots' CEO came when private-equity firm Sycamore Partners offered to purchase the company for $3.05 in cash. At the time, Sullivan scoffed that the offer was too low and walked away from the deal. After failing to find any takers for the company at a higher price Talbots approached Sycamore a few months later to inquire if that original offer was still on the table. Unfortunately, the offer to buy Talbots was, but the original price of $3.05 per share wasn't. Ultimately, in true Seinfeld-character George Costanza fashion, Sullivan held out for less money and sold Talbots to Sycamore for $2.75 in cash. As if that weren't enough, she championed the deal as a "positive development for all of our stakeholders." A positive development as opposed to what, imminent bankruptcy?
  • An exorbitantly selfish pay package: During her tenure, Sullivan has been a punching bag for good reason, not only for her company's poor performance, but also because of her exorbitantly selfish compensation packages. In 2008, for example, Talbots suspended its dividend, froze its pensions, and let 370 employees go -- but good ole Trudy received a $1.2 million raise in her compensation package since her retirement benefits were reduced. In total, between 2007 and 2010, Sullivan received nearly $27 million in compensation; but she wasn't done. As part of the deal to sell Talbots to Sycamore, she was entitled to receive $6.2 million in compensation, as well as $5 million in a severance package from her resignation. Allow me to repeat this key point: Sullivan sold the company for less money than was originally offered, and took home a gigantic golden parachute. Where's my "bang head here" sign?
  • Abysmal stock performance: The final nail in the coffin should be self-evident: Talbots' pitiful performance under Sullivan. If you owned Talbots' stock the day Sullivan took over the CEO role until the day it went private, you would have lost 88% of your investment. The sad part is that without the Sycamore buyout, Talbots was on course for a possible bankruptcy filing with the way things were going. If there's any good to this story, it's that Sullivan finally stepped aside in August with Sycamore now in full control of the company. I'm not sure if the damage done by Sullivan is reparable, but at least now there's some chance of a turnaround.

Is Trudy Sullivan 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 three weeks for the latest nominations, and be sure to hit up the CEO of the Week board to voice your opinion to the community.

Talbots clearly didn't have the right answers when it came to understanding retail customers, but our analysts at Stock Advisor have identified three companies who do have all the answers. Find out the identity of these three stocks well on their way to ruling the retail sector, as well as the reasoning behind them, for free, by clicking here to get your copy of this latest special report.