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The worst executive screw-ups of 2014

The nuts were served without asking.

This indignity compelled Heather Cho, a Korean Air Lines vice president, to order a departing jetliner back to the gate at New York’s John F. Kennedy airport earlier this month, and boot a flight attendant off the plane. The airline’s policy is to ask first-class passengers if they want nuts, then serve them on a plate if nuts are desired. But on Cho’s flight, the Korean Air flight attendant handed out bags of nuts—not plated—without bothering to ask if anybody wanted them. Some bosses might have corrected the oversight quietly, out of sight. But Cho opted for a grandiose display of authority that delayed a flight with 250 passengers. When the story went public and the inevitable outcry materialized, Cho—the wealthy daughter of the airline’s chairman—apologized and resigned.

Corporate executives enjoy a lot of privileges, and sometimes abuse them--until something unfortunate happens and the public learns of their boorish behavior. The etiquette police came out after the 2008 financial meltdown, with bigwigs axing the glitz and making a show of flying commercial, as if in solidarity with backsliding middle-class families. But the recovery has brought back executive privilege and the poor judgment that sometimes accompanies it. For Cho and these 11 other honchos, such hubris backfired this year:

Michael Jeffries

AP Photo/Mark Lennihan
AP Photo/Mark Lennihan

While CEO of teen retailer Abercrombie & Fitch (ANF), Jeffries stoked controversy by saying his brand was only for “cool kids” and enforcing an obsessive code of conduct for the staff on the company’s Gulfstream jet, including the handling of Jeffries’ three dogs when they were on the plane. When the brand was hot, shareholders tolerated Jeffries’ peccadilloes. But pressure mounted as the chain lost cachet, sales fell and the stock dropped by 15% this year, leading Jeffries -- who lost his role as Abercrombie chairman in January -- to retire in early December.

Emil Michael

YouTube
YouTube

As a top Uber exec, Michael uttered the Wish-I-Hadn’t-Said-That Remark of the Year when he suggested Uber might pay investigators $1 million to dig up dirt on journalists critical of the company, with a special reference to Sarah Lacy of Pando Daily. The resulting uproar led Uber CEO Travis Kalanick to apologize on Michael’s behalf, saying through his Twitter account that Michael “showed a lack of leadership, a lack of humanity, and a departure from our values and ideals.” He chose not to fire Michael, however.

Patrick Henry

While CEO of Entropic (ENTR), which makes semiconductors for home entertainment systems, Henry got into a violent row with reality TV star Ari Bellamar during what was supposed to be a romantic getaway in Utah last January. The two dispute what happened, but in June a Utah judge found Henry guilty of assault, fining him $400 and ordering him to perform 40 hours of community service. Entropic’s board fired Henry in November, as the company struggled with losses and laid off a big chunk of its workforce.

David Tovar

The top spokesman for Walmart (WMT) became news himself in September when it surfaced that he lied on his resume about getting a bachelor’s degree from the University of Delaware. While Tovar did spend four years at the school, he explained to the New York Times that he ended up “a couple of credit hours short” and never got around to finalize his degree. Walmart quietly ousted him.

Desmond Hague

CEO Desmond Hague was captured abusing a puppy.
CEO Desmond Hague was captured abusing a puppy.

A man and a midsized dog enter an elevator in a Vancouver condominimum complex. Nothing remarkable happens -- until the man begins kicking the dog for no apparent reason, then yanking the Doberman off the floor by its leash. Authorities investigating the incident over the summer discovered that the dog-kicker in the elevator video was Hague, the CEO of Centerplate, a large stadium and retail concessionaire. When busted, he explained that “minor frustration with a friend’s pet” forced him to “lose control of my emotional response.” Outraged animal lovers campaigned vigorously for Hague’s ouster. Since pets rule, Centerplate complied and fired Hague in early September.

Justin Mateen

The co-founder and chief marketing officer of dating app Tinder developed a steamy relationship with a subordinate, Whitney Wolfe, that deteriorated into an ugly battle that played out before many inside the company. Wolfe left the company last spring and filed a lawsuit alleging that Mateen and Tinder CEO Sean Rad subjected her to “horrendously sexist, racist, and otherwise inappropriate comments, emails, and text messages”—with copies of many of them included in the legal complaint. Tinder quickly settled the suit for an undisclosed sum during the summer, while Mateen left the company around the same time.

Rakesh Agrawal

Just two months after becoming PayPal’s director of global strategy last March, Agrawal began a public tweet rant disparaging several PayPal staffers while spending a weekend in New Orleans partying. Agrawal had grown disenchanted with PayPal and was planning to leave, but most of his colleagues didn’t know that, and the strange tweet bombs became a huge Silicon Valley gossipfest. Once the dust had settled, PayPal tweeted from its official account, “Rakesh Agrawal is no longer with the company. Treat everyone with respect.”

Tom Perkins

REUTERS/Robert Galbraith
REUTERS/Robert Galbraith

The venerable Silicon Valley venture capitalist, who's now retired, upset a lot of people this year. He got started by saying rich people who pay a lot of taxes are “persecuted” by the government, similar to the way Jews were persecuted by the Nazis. Then he said at a public forum in San Francisco that rich people should get more votes than everybody else because they pay more in taxes. (Some would argue they already get more votes, through influential campaign contributions.) Since he’s rich himself and no longer working, Perkins can say whatever he wants, though the caustic remarks gave an elitist cast to the famous firm he co-founded, Kleiner Perkins Caufield & Byers.

Donald Sterling

AP Photo
AP Photo

On a fateful and now notorious phone call earlier this year, the owner of the Los Angeles Clippers NBA franchise chastised his girlfriend for “associating with black people” and posting pictures of herself with black friends, such as Magic Johnson, on Instagram. The call, which somebody recorded and leaked to TMZ, turned Sterling into a pariah whom the NBA permanently banned from the league. Former Microsoft CEO Steve Ballmer bought the team from him in August for $2 billion.

Gurbaksh Chahal 

Getty Images/Charley Gallay
Getty Images/Charley Gallay

As CEO and chairman of RadiumOne, an advertising technology company, Chahal put the company in an awkward bind when he was charged with 45 felony counts alleging he committed violence against his girlfriend at his San Francisco apartment. Chahal aggressively defended himself and wrote one bizarre blog post accusing the woman of “having unprotected sex with other people for money.” In April, Chahal pleaded guilty to misdemeanor charges, as the felony complaints were dismissed. The deal entailed three years of probation and required Chahal to undergo a year of domestic-violence counseling. The company fired him shortly thereafter.

Dov Charney

REUTERS/Mario Anzuoni
REUTERS/Mario Anzuoni

The American Apparel (APP) founder and CEO seemingly tried to get fired for years, as allegations of sexual harassment and other types of offensive behavior mounted. The company’s board finally got serious this year as it learned that Charney had helped arrange the online publication of nude photos of a former employee who had sued him for sexual harassment. It fired him in June, though Charney still owns a big chunk of the company’s stock. The whole saga cost the company millions and helped push the stock down 55% this year, to a shabby 55 cents per share. Bad behavior does have consequences.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

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