For Good or Ill, Founders Who Got the Boot

How are chief executive officers like everyone else? CEOs—often the company's founder—can unexpectedly find themselves without a job.

Ousting a founding CEO can be about business or about sending a signal. It can involve scandal and skullduggery, and it can have disastrous results or be the best thing that ever happened. Sometimes, fired leaders make triumphant returns.

Here are some notable cases in which CEOs were shown the door.

By Jeff Kagan
Posted 21 June 2013

Men's Wearhouse chief George Zimmer was fired Wednesday—the day of the annual shareholders meeting. He launched the company's precursor in 1973, when he was just out of college, and became CEO in 1991. His famous TV commercial tagline, "I guarantee it," made him its public face.

In 1992, Zimmer took Men's Wearhouse public, ushering in an era of tremendous growth and sales. It hit revenues of $1 billion year in 1998 and in 2000 expanded to include a tuxedo-rental and proprietary dry-cleaning service.

In 2011, Zimmer turned over the CEO title to President Douglas Ewert but remained executive chairman of the board.

Tech entrepreneur Steve Jobs had a tumultuous history with Apple, which he co-founded in 1976 and took public in 1980.

Jobs avoided the CEO position in the early years but was renowned for working hands-on with product development, where his demand for perfection would become part of his legacy. In 1985, the board effectively fired him, saying that Jobs was stressing out Apple's workforce.

Though disillusioned initially, the young multimillionaire went on to start NeXT and Pixar Studios. He became CEO of Pixar in 1995, the same year box-office smash "Toy Story" was released. (The Walt Disney Co. bought Pixar in 2006 at a valuation of $7.4 billion.)

In 1997, the wunderkind was asked to rejoin the now-struggling Apple. He accepted the interim CEO position and oversaw the company's rebound, revamping the product line and re-energizing the investor base.

In 2004 and 2009, the seemingly invincible Jobs struggled with recurring pancreatic cancer and underwent a liver transplant in 2009. He relinquished the CEO post to Tim Cook in August 2011 and died two months later.

After owning an audio specialty store near his hometown of St. Paul, Minn., Richard Schulze founded Best Buy in 1983. He took the company public in 1985 and by 1992 had achieved revenues of $1 billion.

Brad Anderson was CEO from 2002 until 2009, when he was replaced by Brian Dunn. But he resigned over allegations of misconduct last year. Schulze stepped down as chairman of the board when the scandal broke.

Hubert Joly now has the CEO job, while in March Schulze assumed the nominal position of "chairman emeritus."

As a young man, John Rigas borrowed money from family members to buy the local movie theater, in Coudersport, Pa. He and his brother then built an empire by purchasing the local cable station and scooping up small-town stations in surrounding states.

Adelphia provided cable services until 2002, when Rigas was forced to resign on charges of corporate fraud that included hiding billions in debt from company officials and investors.

He was sentenced to 15 years in prison in 2005.

The former Brooklyn-based discount electronic store chain Crazy Eddie, founded by cousins Eddie and Sam Antar in 1971, was famous throughout the tristate area for its zany TV commercials.

In 1987, Crazy Eddie became notorious when the Securities and Exchange Commission began investigating the Antars for securities fraud. He was charged in 1989. The family was removed from the business, which soon declared bankruptcy and liquidated.

In 1996, Eddie Antar—whom the U.S. attorney called "the Darth Vader of capitalism"—pleaded guilty to fraud. He was ordered to pay $150 million in fines and sentenced to eight years in prison.

Though there's some controversy about who designed their original product, Lerner co-founded founded Cisco Systems with boyfriend (later husband and ex-husband) Len Bosack in 1984 while they were both working at Stanford University.

The were both forced out of Cisco shortly before it went public in 1990.

Post-Cisco, Lerner has founded a successful cosmetics line, Urban Decay, written a Jane Austen-inspired book and taken up organic farming.

McClendon was young—23—when he started oil and natural gas investment firm Chesapeake Investments in 1982. By 1993 it had gone public and was a major player in natural gas.

The founder was the highest-paid CEO among the S&P 500 companies in 2008, receiving more than $100 million in compensation for turning Chesapeake into a powerhouse.

Last year, McClendon and his company became mired in allegations that included misuse of Chesapeake stockholder equity and employee harassment. He gave up the CEO title, then severed ties with the company in April.

Neeleman began his airline career after dropping out of the University of Utah to co-found Morris Air in 1984. Southwest Airlines soon bought Morris Air, and he left to take over airline reservation company Open Skies. In 1998, he incorporated JetBlue and became CEO.

Disaster struck Neeleman in the form of a snowstorm on the Eastern Seaboard in February 2007 that left thousands of passengers stranded and the CEO unable to respond.

Chief Operating Officer Dave Barger replaced him as CEO, and Neeleman, who stayed on at first as "nonexecutive chairman," eventually left the board.

This is a tale of the back and forth that sometimes reflects a start-up's growing pains.

Rob Kalin founded the hip e-commerce website Etsy in 2005 and held the position of CEO until 2008, when NPR executive Maria Thomas was recruited to take over.

Thomas stayed with the company—which remains private—for just a year. Kalin reassumed the chief's role, and held it until 2011, when Chief Technology Officer Chad Dickerson took the reins.

While attending law school in California, Richard Thalheimer started a part-time office supply business he called The Sharper Image to promote the quality of his copy machines.

Thalheimer developed the company by selling unusual, high-tech gadgets. In 2003, its revenues were more than $700 million. Trouble ensued when new investors got on the board, however, and in 2006 they removed him as CEO.

The new CEO, Jerry Levin from Revlon, and the rejiggered board did not want anything to do with Thalheimer and bought back his shares. In less than a year, the new directors had driven The Sharper Image to bankruptcy. They closed all remaining stores in mid-2008 in an effort to save the business.

Jerry Yang and David Filo, who met at Stanford, founded Yahoo in 1994. The two shared the CEO title after they went public in 1996, but in 2001, moviemaker Terry Semel was hired as CEO.

Semel, who was brought in to make Yahoo more marketable, had success his first year. But after a failed attempt to buy Google, it became apparent that he wasn't the man for the job. Yahoo quickly lost ground in the search engine battle, and its shares suffered.

In 2007, Yang returned to Yahoo to take back the CEO post. He rejected a buyout offer from Microsoft and soon found himself out again, with Carol Bartz of Autodesk appointed CEO. She held the post through 2011.

Yang, who had remained on the board, decided to sever all official ties with Yahoo and resigned as a company director in January 2012.