After Groupon's Mason: Could These Embattled CEOs Be Next?

Michael Teague |

GRPN, Andrew Mason, earnings report, quarterly report, loss, revenueThursday’s announcement that Groupon Inc. (GRPN) was finally sending its founder and CEO Andrew Mason on his way did not come as much of a surprise.  Indeed, in the last year the company has seen its stock value plummet nearly 70 percent, a period during which it dipped as low as 87 percent.  Mason was largely blamed for the company’s loss of market share to competition from the likes of Amazon.com (AMZN) and Wal-Mart (WMT). A dreary fourth-quarter earnings statement took care of the rest, and now the Chicago-based company is searching for his replacement.

Mason, however, was not the only CEO whose tenure has been in question as of late.  Here are some other CEOs who may be heading to redundancy sooner rather than later:

Harold Whittlesey McGraw III of The McGraw-Hill Companies Inc. (MHP) -- McGraw sounded confident last November during a conference call with investors, during which he boasted of how no less than 30 lawsuits against McGraw-Hill’s S&P division had been dismissed. The litigation was predicated on the company’s bestowing AAA ratings on mortgage-backed securities that were junk. In any event, the whole thing is boomeranging and now the Justice Department and State Attorneys alike are suing McGraw for fraud. Harold McGraw himself is not personally being sued of course, but it is hard to imagine that he will not be held responsible for the company’s stock price dropping rather severely--almost 19 percent over the last month since news of the new legislation was announced.

Ron Johnson of J.C. Penney Co. (JCP) -- Credited with Apple's (AAPL) ubiquitous and ground-breaking retail stores, it was thought that he, if anyone, could have saved J.C. Penny from the decline it was already experiencing when he was hired last year. However, this week’s earnings report was just one in a succession of consecutive dismal showings for the company under Johnson’s leadership. The company lost $552 million, or $2.51 per share; on an adjusted basis, the loss was $427 million, or $1.95 per share, while revenue was down 28.4 percent to $3.88 billion. Analysts had expected a loss of 23 cents on revenue of $4.08 billion. The department store’s troubles are being squarely placed on the shoulders of its new CEO, in particular his overhaul of the sales and coupon programs with which the Penney brand had been more or less synonymous for years. The elimination of these has driven away a large swathe of the store’s otherwise extremely loyal customer-base, and has prompted Johnson to promise their reinstatement, in substance if not name, over the coming year.

Rory Read of Advanced Micro Devices Inc. (AMD) -- The broad line semiconductor company has suffered along with anyone else whose fortunes are/were tied up in the PC market. Read signed on with AMD in 2011, and has been presiding over the company during the meteoric rise of mobile devices, which really is an unfortunate coincidence. All the same, recently released Q4 and 2012 earnings reports indicate that the company lost $1.18 billion in revenue, $1.60 per share. But the company’s poor showing cannot all be blamed on tectonic shifts in consumer demand that are leaving PCs in the dust. Intel (INTC), for instance, has also suffered heavy losses for similar reasons, primarily mobile’s enormous and exponential popularity, but still manages to beat AMD across the board in whatever is left of the market in which they compete. For 2013, Read has promised research and development as his way out of the company’s poor earnings, but it is hard to see how the losses will be recuperated given the current state of things.

There are other CEOs, of course, who could have been included in this list, embattled as they were for much of 2012. For instance, Zynga Inc.'s (ZNGA) Mark Pinkus, and John Riccitiello of Electronic Arts Inc. (EA) presided over terrible years in 2012, but were saved for the time being by better-than-expected Q4 earnings results. On the scandal end of resignation, Chesapeake Energy Co. (CHK)'s Aubrey McClendon would surely have been included, were it not for the fact that he has already set his resignation for April 1st in the wake last year's major scandals involving his use of company money.

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Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 112.71 -1.91 -1.67 52,510,210
AMD Advanced Micro Devices Inc. 6.55 0.18 2.83 61,028,355
AMZN Amazon.com Inc. 805.75 1.05 0.13 2,356,485
CHK Chesapeake Energy Corporation 6.63 -0.24 -3.49 30,559,871
EA Electronic Arts Inc. 84.26 1.09 1.31 2,644,404
GRPN Groupon Inc. 5.32 -0.11 -2.03 2,873,575
JCP J.C. Penney Company Inc. Holding Company 9.78 0.02 0.20 7,767,422
WMT Wal-Mart Stores Inc. 72.35 0.08 0.11 7,696,449
ZNGA Zynga Inc. 2.84 0.00 0.00 6,456,245

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