It's that time of the year again, folks! It's time to dust off the cyber awards and crown five CEOs with the dubious honor of being the worst of the worst in 2013.
Last year we held several rounds of public voting after I arbitrarily picked eight of the best and worst CEOs. I wanted to do something different this year. So instead of randomly picking whom I thought should be in each category for 2013, I reached out to as many of my Motley Fool colleagues as possible and aggregated their answers into one list. The end result is a considerably more balanced list representing a wider swath of views, and likely a more accurate portrayal of the worst CEOs of the year than I could have come up with by myself.
Each week, starting today, I'll unveil one of the selected CEOs of the year, counting backward to No. 1. So without further ado, here's The Motley Fool's fifth-worst CEO of the year:
Thorsten Heins, the now-former CEO of BlackBerry (NYSE:BB).
Why Thorsten Heins?
Perhaps a better question would be "Why not?" considering I can't think of a single important metric that improved while Heins was CEO of mobile device maker BlackBerry. The product failures and instances of poor management under Heins are almost too long to list, but let's give it a try, shall we?
When Heins was promoted to the role of CEO 22 months ago after co-CEOs Mike Lazaridis and Jim Balsillie decided to step down -- to investors' delight -- the expectation was that his fresh leadership would reinvigorate innovation at the struggling BlackBerry. The problem was that innovation at BlackBerry moved slower than molasses in winter.
In 2009, BlackBerry controlled about half of all smartphone market share. Then the combination of Apple's (NASDAQ:AAPL) iPhone and Google's (NASDAQ:GOOGL) Android OS-driven devices practically wiped it off the map. Currently BlackBerry controls less than 3% of the remaining U.S. smartphone market share -- and that figure is still shrinking.
Less than a week after Heins was hired, when talking with analysts, he commented (in an effort to instill confidence in shareholders) that "no drastic change was needed" with regard to BlackBerry's business model. Well, we've seen how well the stay-the-course method has worked out for BlackBerry, and it isn't pretty.
Apple was able to use its superior cash balance and innovative advantage to develop a mobile device that utilized touchscreen technology, rather than a clunky and space-consuming QWERTY keyboard. The end result was a thing of beauty known as the iPhone that practically revolutionized the consumer smartphone market. Whereas BlackBerry sold around 3.7 million of its newest smartphones in the latest quarter, Apple moved a whopping 33.8 million! Game, set, match, Apple!
But it wasn't just the phone itself or aesthetic appeal that set BlackBerry behind its peers. Its clunky operating system also had non-enterprise customers clamoring to switch to either Apple's iOS or Google's Android OS. The BlackBerry operating system was often criticized for its inability to "play nice" with other apps and generally for its slow processing capabilities. As if BlackBerry hasn't lost enough market share domestically and overseas, Google is currently in the process of rolling out its latest version of Android, KitKat 4.4, which will actually be compatible with older Android devices, making it one of the more attractive OS options to date.
The development of BlackBerry's updated smartphones -- the Z10 and Q10 -- also wound up being a gigantic disappointment. Both smartphones took two years to bring to market -- an eternity in the smartphone space -- with multiple delays along the way pushing back the debut by months at a time. When they did finally debut, sales of both devices proved dismal on an individual and -- surprisingly -- enterprise basis. In the second quarter, BlackBerry announced that it lost a mammoth $965 million, primarily due to inventory writedowns, and that it was shelving two of its six smartphone models, as well as laying off an additional 4,500 workers. With Heins at the helm, BlackBerry let go of 9,500 workers!
A botched buyout and a golden handshake
To add insult to injury, BlackBerry's lone bright spot, the company's purported $9-per-share buyout by Canada's Fairfax Financial, fell through earlier this month, with the company instead announcing the firing of Thorsten Heins and a $1 billion investment led by Fairfax. This idea of getting rid of Heins might sound favorable if not for the fact that Heins was sitting on a golden parachute or golden handshake no matter how BlackBerry performed.
According to Bloomberg, if the deal between Fairfax and BlackBerry had been struck, a change in management would have entitled Heins to a golden handshake compensation package totaling $55.6 million in addition to the $20 million he would have earned in salary in his close to two years as CEO. While that's obviously not the case now, Heins' departure still likely leaves BlackBerry on the hook for $22 million in salary as a severance package. Not a bad payday for a CEO who oversaw his company's share price tumble 62% since taking over the role.
Stay tuned as we unveil our fourth-worst CEO and our fourth-best CEO of the year next week.