BUSINESSWEEK ONLINE: JANUARY 8, 2001 ISSUE

The Top 25 Managers -- The Losers

Linda Wachner, Warnaco

Linda Wachner, CEO at apparel maker Warnaco Group Inc. (WAC) since 1986, has always been known as a tough manager and a fast talker. When Warnaco was doing well, those were considered compliments. They're not anymore. Warnaco surprised investors in November when it said that it had lost $24 million in the third quarter and would lose money for the year. The stock dropped 30% in one day. By late December, it was off 87% for the year. And it's not just investors who have had enough. Designer Calvin Klein, with whom Wachner has a licensing agreement, sued her for mishandling his brand. He described Wachner, 54, as having a ''vulgar and unprofessional management style.'' Wachner, true to form, countersued.

But don't look for the board to push Wachner out. Ever the dealmaker, she cut an agreement in 1991 that gives her $43 million if Warnaco fires her.



Michael J. Saylor, MicroStrategy

Super Bowl Sunday 2000 gave Michael J. Saylor, 35, a hint of things to come. The CEO of software maker MicroStrategy Inc. (MSTR) had rented out FedEx Field, home of the Washington Redskins, for a game-day bash--but the weather turned out to be cold, wet, and nasty. The party would soon be over in more ways than one. MicroStrategy shares, $266 in March, have fallen to about $11 after the company was forced to restate 1997-1999 earnings, wiping out profits. Now, after shareholder lawsuits and the settlement of SEC charges, a newly chastened Saylor admits: ''I let down a lot of people.''



James E. Goodwin, UAL

In May, James E. Goodwin, the new chairman and CEO of UAL Corp. (UAL), stunned the industry by agreeing to buy US Airways Group Inc. (U) for $11.6 billion. Since then, however, UAL has been the one in shock.

The proposed deal brought wage discontent among UAL pilots to a head. They staged a summer work slowdown that disrupted schedules, cost UAL's United Airlines tens of millions of dollars, and infuriated passengers. The pilots ended up with big pay raises. But their slowdown has emboldened other unions--both at UAL and other carriers--to threaten similar job actions. And to top it all off, Goodwin, 56, still hasn't gotten the antitrust O.K. needed to clinch the US Airways deal. As a result, UAL shares fell by more than 50% in 2000. That's some record for your first full year as CEO.



Bill Gross, idealab!

Bill Gross, 43, is credited with creating a new type of investment firm, the Internet ''incubator,'' which provides office space and professional services to fledgling companies. Since it began in 1996, idealab!, based in Pasadena, Calif., has cranked out dozens of consumer e-businesses, such as CarsDirect and Goto.com. Gross opened offices in Silicon Valley, Boston, New York, and London. With others copying his methods, he was hailed as an Internet genius.

But lately, his incubator has hatched nothing but rotten eggs. On average, stocks of the seven public idealab! companies are 96% below their 52-week highs. Cosmetics site Eve.com has gone belly-up, and cash-strapped eToys may be on the block. So Gross is now backing business-to-business Net companies, burning through $6.5 million a month in overhead to do it. He still believes in idealab!, but admits the model doesn't work ''if you're not starting the right kinds of businesses.'' That's a lesson learned the hard way.



Bernard J. Ebbers, WorldCom

What a difference a year can make. Bernard J. Ebbers began 2000 rightfully believing the world was his oyster. By spring he expected to close his $120 billion purchase of rival long-distance carrier Sprint Corp. (FON), transforming WorldCom Inc. (WCOM) into a leading player in both wireless telephone service and the burgeoning market of Internet services. But the deal was nixed by federal antitrust regulators and Ebbers' company has been in a free fall ever since. WorldCom's core long-distance business is plummeting. Its Net strategist, John Sidgmore, may be leaving. And the company's stock is off more than 70% since January, 2000, to around $15 a share.

And the usually self-assured Ebbers? The 59-year-old said recently that he may not even be the best person to run WorldCom.



TABLE: The Golden Handshake

Getting bounced from the corner office isn't all bad. These five former CEOs hit it big in 2000

DOUG IVESTER walked away from Coca-Cola (KO) with $120 million severance pay after 28 months

JILL BARAD resigned from Mattel (MAT) with $50 million after 37 months

RICK THOMAN departed Xerox (XRX) with $35 million after 13 months

DURK JAGER left Procter & Gamble (PG) with $9.5 million after 17 months

DALE MORRISON quit Campbell (CPB) with $4 million after 33 months



Worst Firing/Worst Hiring

-- Auction house Christie's eased out CEO CHRISTOPHER DAVIDGE, who then turned over notes about a six-year price-fixing scheme with Sotheby's to U.S. prosecutors. Christie's and Sotheby's were each fined $512 million.

-- Sotheby's then-chairman, Alfred Taubman, appointed DIANA BROOKS CEO in 1994. Brooks pleaded guilty to a single charge of violating antitrust laws in October, laid blame for her participation in the price-fixing conspiracy squarely on her former mentor, and agreed to assist the government in its continuing probe of Taubman.



TABLE: Dot.Conned

George Shaheen, CEO, WebVan (WBVN)
Shaheen, 56, left Andersen Consulting for WebVan, now dangerously low on cash. Meanwhile, Andersen could go public--valued at $25 billion.

Heidi Miller, Former CFO, Priceline.Com (PCLN)
She was one of the top corporate defectors in 2000. Miller, 47, resigned as Citigroup CFO to join Priceline. Eight months later, she quit, seeking ''a more established business environment.''

Rebecca Mark, Former CEO, Azurix (AZX)
As a high-profile Enron exec and possible heir to then-CEO Kenneth Lay, Mark pushed to create Azurix, an online water exchange, in 1998. Mark, 46, burned up cash, and Azurix' stock tanked. She resigned in August.

Ellen Marram, Former CEO, EFDEX Inc.
After leaving the top job at Tropicana, Marram, 53, moved to EFDEX, an online commodities exchange. Growth stalled, its IPO was halted, and she quit within the year.





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The Top 25 Managers


The Managers to Watch

The Best Regulators

The Top Entrepreneurs

The Losers and the Dot-Conned
RELATED ITEMS
STORIES:
Linda Wachner, Warnaco

Michael J. Saylor, MicroStrategy

James E. Goodwin, UAL

Bill Gross, idealab!

Bernard J. Ebbers, WorldCom

TABLE: The Golden Handshake

Worst Firing/Worst Hiring

TABLE: Dot.Conned

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