Even as Michael Eisner straddles the threshold of oblivion, plenty of other underperforming CEOs remain unheralded. This month, with the help of corporate governance specialists Glass, Lewis & Co. LLC, we’re looping our cane around the neck of David McCourt, CEO of cable operator RCN Corp.
CEO: David McCourt
Tenure: 6 Years
Total Shareholder Return: -99%
Peer Index Return: -65.1%
S&P 500 Index Return: -13.4%
Total CEO Pay: $10.9 million
McCourt steered RCN toward ruin pretty much from the day he founded it. With $575 million in junk debt, McCourt built a voice-and-data network with which to underbid AT&T, AOL, and Comcast. But RCN’s low-ball prices didn’t pay the costs of operations, much less service $1.7 billion in debt needed to complete its network. Never profitable, RCN laid off 2,000 workers between 2001 and 2002. This year, RCN missed two interest payments, and on March 1, it said it expects to seek bankruptcy protection. It says McCourt is “committed to leading RCN through this restructuring.”
*Data from Glass, Lewis & Co. and FactSet Research Systems for five years ending March 12, 2004. For a fuller explanation of our methodology, go to www.fastcompany.com/keyword/CEO82.