CEO Controversy: These Prominent CEOs Were Forced to Leave Their Own Companies

What goes up must come down. Prominent CEOs and founders know that loving something means they must also be willing to let it go. Sexual harassment allegations, ethical violations, and damaging PR blunders are almost always fatal to a company’s reputation and bottom line. And it’s the high-profile founders who are often the first to go amidst such scandal.

George Zimmer and Steve Jobs are prime examples of entrepreneurial greats who were forced to leave their own companies. But they’re not the only ones who’ve lost it all for actions both in and out of the workplace. Here are 15 noteworthy CEOs and founders who were famously fired from their own companies.

1. John Schnatter, Papa Johns

John H. Schnatter, Founder, Chairman & CEO of Papa John's Pizza

His comments led to shares dropping 30%. | Rob Kim/Getty Images

Comments regarding the National Football League’s leadership over national anthem protests sparked the beginning of the end for Papa John’s founder and CEO, John Schnatter. “By not resolving the current debacle to the player and owners’ satisfaction, NFL leadership has hurt Papa John’s shareholders,” Schnatter said during a November company call. “Leadership starts at the top, and this is an example of poor leadership. ”

These comments sparked instantaneous backlash on social media, especially since Papa John’s has been the NFL’s official pizza chain since 2010. COO Steve Ritchie will be tasked with making the company profitable again in 2018. Its shares were down 30% in 2017.

Next: The biggest story of 2017

2. Harvey Weinstein – The Weinstein Company

Harvey Weinstein tight on his face in a tuxedo

It’s pretty much obvious why. | Loic Venance/AFP/Getty Images

Though Harvey Weinstein has publicly denied the allegations, 84 women have come forward to accuse him of unethical and criminal behavior ranging from intimidating sexual advances to rape. The bombshell news ended Weinstein’s tenured career in the film industry almost immediately. In fact, he was fired by his own board. Miramax, the company he founded and later sold to Disney to launch The Weinstein Company, was responsible for box office hits such as Saving Private Ryan, Shakespeare in Love, and Gangs of New York.

Next: A lesson learned for this famous founder

3. Sandy Lerner, Cisco

Co-founder of Cisco and honoree Sandy Lerner

It was more about politics than anything else. | Neilson Barnard/Getty Images

Sandy Lerner learned a valuable lesson when she was forced to leave Cisco, the company she co-founded. But sometimes, termination is the not the result of blatant scandal, but business politics instead. In an interview with Inc Magazine she confessed to being too naive accepting Don Valentine’s $2.6 million investment for 30% of her company (Valentine ultimately played a large part in her firing years later.)

She says, “I did not understand an investor could be an adversary. I assumed our investor supported us, because his money was tied up in our success. I did not realize he had decoupled the success of the company from that of the founders.”

Next: This one’s just weird

4. Dov Charney, American Apparel

Former American Apparel CEO Dov Charney

He claims he was just ‘born strange’. | Stephen Shugerman/Getty Images

Some would venture to say Dov Charney sank his career himself. The board terminated the founder of American Apparel after ongoing allegations of misconduct. To be fair, Charney never really shied away from his countless sexual misconduct allegations — including those that claimed he often held company meetings in his underwear.

In a candid interview with Marketplace, he says, “My biggest weakness is me. I mean, lock me up already! It’s obvious! Put me in a cage, I’ll be fine. I’m my own worst enemy. But what can you do—I was born strange.” American Apparel hasn’t been posting the same sales numbers it is used to and bad PR from its founder definitely didn’t help future endeavors.

Next: A shocking confession

5. Renaud Laplanche, Lending Club Corporation

Lending Club Founder and CEO Renaud Laplanche

Laplanche left the company after the Justice Department launched an investigation. | Don Emmert/AFP/Getty Images

Lending Club CEO Renaud Laplanche, was pushed out following an investigation into dubious sales practices. The Department of Justice opened the investigation after the company revealed it knowingly sold an investor over $22 million of loans the investor did not want. Reuters also reported application dates were altered to appease the client. Laplanche, who founded the company himself, cut ties with Lending Club shortly thereafter.

Next: Expansion struggles plagued this founder

6. Rob Kalin, Etsy

Rob Kalin founder of Etsy on a couch

People had doubts about his ability to scale the company. | Etsy via Youtube

Esty did a whopping $400 million in sales under Rob Kalin’s leadership. Still, the founder stepped away from his company, not once, but twice. He first left in 2008, but his 2011 departure was the exit that stuck. His permanent withdrawal came after speculation about his ability to scale the company and manage the growing pains typical of the widely popular e-commerce marketplace. Rather than cause further damage, he handed the reins over to his co-founder, Chad Dickerson.

Next: You know all about this next scandal

7. Travis Kalanick, Uber

Co-founder and Chief Executive Officer (CEO) of US tranportation company Uber Travis Kalanick

Uber faced several PR crises in 2017. | Money Sharma/AFP/Getty Images

Perhaps one of the most notable founders who was forced to leave their own company is Travis Kalanick. Uber faced a 2017 rampant with PR crises including toxic work environments and ethical concerns, as well as sexual harassment claims from employees.

Kalanick began with an indefinite leave of absence, before officially resigning in June 2017. There are additional reports saying he plans to sell nearly 30% of his Uber shares (though he previously vowed not to). A sale this size would make him a true billionaire, says Fortune.

Next: Scandal and politics

8. Roger Ailes, Fox News

Roger Ailes

Roger Ailes had accusations in the double digits. | FOX News

2017 was a rough year for Fox News and its employees. Top-rated anchors like Bill O’Reilly and Eric Bolling were accused of sexual harassment and watched as their popular TV shows were canceled as a result. All this, of course, came after network executive Roger Ailes was slapped with multiple allegations of sexual harassment by his colleagues. Ailes, who built Fox News into a media empire with Roger Murdoch’s money, was ousted from the network completely. He also immediately resigned as chairman after his allegations from women reached double digits. Ailes passed away in May 2017.

Next: Even one mistake could be deadly for high-profile founders.

9. David Neeleman, Jet Blue

David Neeleman, Chief Executive Officer of Jet Blue Airways

He is now running another airline. | Stephen Chernin/Getty Images

There’s no worse PR blunder for an airline company than stranding over 1,000 passengers and canceling more than 1,200 flights in just six days. Unfortunately, that exact scenario is what forced Jet Blue’s founder and former CEO, David Neeleman, to resign from his leadership position in 2007. He launched Jet Blue in 1999 and it was the only airline to make a profit in the years following the September 2001 attacks. Needleman’s post-firing recovery was quick. He founded profitable Azul Brazilian airlines just one year later.

Next: Tech dynasty in trouble

10. Lee Jae-yong, Samsung

Samsung Group heir Lee Jae-yong

The former head of Samsung landed in jail. | Chung Sung-Jun/AFP/Getty Images

In 2016, it was exploding batteries that plagued Samsung Electronics. In 2017, it was leadership woes. Family-run Samsung had planned to award the founder’s grandson, Lee Jae-yong, an executive position with the company. But embezzlement accusations, bribes, and the attempt to hide assets overseas had him facing jail time instead. Samsung was forced to place multiple family members into leadership positions because of such turmoil. It’s unknown the effect this shake-up will have on the company moving forward, especially considering just how far the family’s influence spans in South Korea.

Next: More sexual harassment claims

11. Justin Caldbeck, Binary Capital

Justin Cadlebeck speaking into a microphone

Several women claimed he sent them crude texts. | straylor via Youtube

Justin Caldbeck’s abrupt termination from his own venture capital firm, Binary Capital, did nothing to debunk the paralyzing stereotype Silicon Valley’s tech culture holds. Six women went public with sexual harassment allegations claiming the founder sent crude text messages and made unwelcomed advances toward them in the workplace. He took a leave of absence immediately and posted an apology online.

Caldbeck didn’t receive any help from his co-founder regarding the allegations either. “The predatory behavior Justin has been accused of is deplorable,” Johnathan Teo wrote in an email, “and there will be zero tolerance at our firm of any conduct that is demeaning to women.”

Next: Drama, drama, drama

12. Martin Eberhard, Tesla Motors

Martin Eberhard Tesla CEO

He was replaced by Elon Musk. | Plenty TV via Youtube

Tesla’s Motors founder, Martin Eberhard, didn’t take kindly to being ousted and replaced by Elon Musk in 2007. In fact, he responded with a lawsuit claiming Musk took control of the company and tried to “rewrite history” regarding the electric Roadster the two men created together. Eberhard also cites the board room meeting — one he wasn’t invited to — where his fate was sealed as a particularly bitter betrayal from his former friend.

Next: Secret cheats

13. Parker Conrad, Zenefits

Co-founder and CEO of Zenefits Parker Conrad

Zenefits failed to comply with California business regulations. | Steve Jennings/Getty Images

An out of control company culture and rampant legal woes forced Parker Conrad, the founder of cloud-based human resources site Zenefits, out of his own company. Zenefits came under investigation for compliance failures surrounding health insurance and business regulations in California. Even worse, Conrad took the fall for the discovery of a secret internal software tool that allowed brokers to cheat the licensing process in California. Zenefits mayhem aside, Conrad secured funding for a new venture, Rippling, in 2017.

Next: Another tech founder takes a fall

14. Tom Preston-Warner, GitHub

Tom Preston-Werner

An employee claimed there was sexism and intimidation at the company. | Pandodaily via Youtube

Tom Preston-Warner was the founder and leading executive of the popular special coding site, GitHub — at least until a highly-scrutinized sexual harassment allegation took him down in 2014. Tech Crunch published a scathing report from a previous GitHub employee who called out sexism and intimidation tactics that were all too common within the company culture. Preston-Warner ultimately resigned while the remaining leaders promised a renewed commitment to HR and employee-led training initiatives.

Next: Blackberry, who?

15. Mike Lazaridis, Blackberry

Research in Motion President and co-CEO Mike Lazaridis

He left at just the right time. | Justin Sullivan/Getty Images

Mike Lazaridis relinquished leadership of Blackberry Limited in 2012, but promised to stay on the company board moving forward. He stepped down from that role 15 months later following the release of the Blackberry 10. Whether his decision to leave his own company was due to stockholder pressure, or because of overall business decline is not known. But it appears his move was a smart one. The once-profitable company is all but dead today.

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