This has not exactly been a great year to be a CEO. In a normal year, there might be a handful of companies whose CEOs stand out like sore thumbs as potential "worst" candidates. This year, it was like trying to sort through eggs in a hen farm. This list could just as easily have been a few dozen CEOs long, thanks in part to a slew of Chinese fraud scandals, Congressional malfeasance, and what I would term a collective series of poor decisions by a number of CEOs.

What I've done is put together a two-part series that's whittled the veritable forest of worst CEO candidates down to 10. In my opinion, these CEOs, through a combination of poor decision-making and a lack of decision-making, are responsible for crushing shareholder equity and potentially crippling the long-term viability of their respective companies. Today, we'll count down from No. 10 to No. 6:

10. Tim Armstrong, AOL (NYS: AOL)
The answer is yes -- AOL does still exist, barely. Long removed from the dial-up days of the late 1990s and its botched merger with Time Warner, AOL still hasn't found its niche and seems destined to slowly bleed market share to its peers.

Even worse, CEO Tim Armstrong seems hell-bent on running his company's balance sheet like he's at a craps table in Las Vegas. Despite purchasing the Huffington Post for $315 million and TechCrunch for a reported $25 million, as well as spending $40 million a quarter on Patch.com, AOL still faces the same challenges in driving traffic to its websites. Armstrong clearly understands that AOL isn't growing organically and that it'll need to buy growth, but those purchases so far just haven't delivered the goods.

Amplifying the woes at AOL has been its new reliance on ad revenue to drive results. In fact, ad revenue has been so strong that Armstrong recently announced that AOL is angling its business to be ad-driven rather than subscription-driven. Not to be a worrywart, but nearly every Internet company that based its business primarily on ad revenue went belly-up in the last decade. If Armstrong can't turn around AOL's ailing market share in the very near future, he could be looking for a new job. Call it a hunch, but I don't think AOL shareholders would be all that sad to see him go.

9. Stephen Elop, Nokia (NYS: NOK)
Mr. Elop deserves a special place on this list because his actions, or lack thereof, are the primary reason that Nokia, still the leading producer of cellphones, is losing market share to rivals Apple, Samsung, and HTC, faster than ever.

Nokia already found itself in a precarious position heading into 2011. Its Symbian operating system was untested, and its smartphones were unpopular next to the Apple iPhone and other better-selling devices. Making matters worse, in February Nokia decided to completely abandon its Symbian operating system in favor of Microsoft's (NAS: MSFT) operating system. Great idea, right? Actually, not so great because it would end up taking most of a year to roll out the new platform. With Nokia way beyond fashionably late to the smartphone party, it appears that Mr. Elop's decision to change the company's direction so late in the game may have cost it any chance to compete against the likes of Apple or HTC.

Nokia now seems relegated to the lower-margin, lower-cost end of the cellphone market. While there is money to be made at this end of the market, it's no wonder that Nokia's gross margin has been on a steady downward slope and its market share is dwindling. Don't be surprised if shareholders show up with pitchforks in hand at the doorstep of Nokia's headquarters if things don't drastically improve over the next six months.

8. Trudy Sullivan, Talbots (NYS: TLB)
Don't let yesterday's buyout offer from private equity firm Sycamore Partners fool you: Talbots has been on an accelerated downward path since Trudy Sullivan took the helm in mid-2007. The company did state on Monday that, after four-plus years of driving Talbots into the ground, Sullivan was planning to retire. But that won't save her from being my eighth worst CEO of 2011.

Talbots has struggled to keep pace with changing consumer trends since the economy peaked in 2007. For a while, I would easily have given the company a free pass, because its competitors also struggled with excess inventory and the unwillingness of their customer base to spend on themselves. The time for excuses, however, has come and gone. Since 2007 Talbots has attempted with regularity to introduce new styles and reduce inventory only to consistently miss its own expectations. You don't see Chico's or ANN dipping into their bag of excuses every quarter.

The creme de la creme, however, comes from Trudy Sullivan's pay. As Fool Alyce Lomax has alluded to on many occasions, Sullivan was taking home exorbitant paychecks loaded with stock-based compensation even as her company's stock sank. Despite years of losses, Sullivan took home nearly $6 million in compensation last year, double the total she took home in 2009. Did I mention that Sullivan will also be receiving a $5 million severance package laced with another two years of equity incentive vesting? Oh, those poor shareholders...

7. Antonio Perez, Eastman Kodak (NYS: EK)
If you're into buying a company where the CEO's strategic direction involves crossing your fingers and praying the courts find in your favor, then perhaps Antonio Perez is the CEO for you. As for the rest of us who consider ourselves to be rational investors, Antonio Perez represents a stubborn figurehead greatly responsible for the demise of a once-great company, Eastman Kodak.

Since Perez took the helm in May 2005, Kodak's stock has plummeted by a saddening 96%. Perez has been uninspiring in his never-ending turnaround story (which evidently is taking the long route) and has instead turned to suing every tech company that may have infringed on its patent rights over the years, including Apple and Research In Motion, in order to stay afloat. Of particular worry to shareholders has been Kodak's reliance on its revolving credit line to finance its day-to-day operations of late -- a worry that has raised bankruptcy fears despite management's insistence to the contrary.

Unfortunately for shareholders, the figures don't lie. Kodak has been profitable on an annual basis only once since Perez took over, while revenue has been cut nearly in half. In fact, free cash flow fell from a $776 million inflow in 2005 to an outflow of $903 million over the past 12 months. Being stubborn has rarely proved a valuable CEO trait, and as I see it, Mr. Perez is exemplifying this with flying colors. Shareholders may want to take their jabs at Kodak while they still have the chance, because I don't anticipate the company surviving much longer.

6. Dan Hesse, Sprint Nextel (NYS: S)
Although Dan Hesse hasn't done quite the job on Sprint that Antonio Perez did on Kodak, he still deserves a mention for the more-than-80% stock decline shareholders have suffered under his reign as CEO. As a distant No. 3 carrier behind AT&T and Verizon, Sprint has struggled under the weight of a large amount of debt and high churn rates for years. Ironically, though, that's not the biggest drag on Sprint's stock price.

No, the biggest drag on Sprint's stock has been the decision at the top to continue to support the three-headed debt monster Clearwire (NAS: CLWR) . Like a child who just won't leave home for good, Clearwire continues to need cash infusions to stay afloat, and like a parent who doesn't learn from their mistakes, Sprint keeps obliging. With another deal announced last week totaling $1.6 billion to keep Clearwire afloat, Sprint's only adding to the huge amounts it has already spent on Clearwire's very unprofitable network.

Since Dan Hesse took the helm in 2007, Sprint not only hasn't turned an annual profit, but it's also stopped paying a dividend, seen gross margin drop from 57% to 45%, and watched its book value erode every year. In that same time period, Mr. Hesse took home $12.3 million in 2009 and $9.1 million in 2010 in executive compensation. If paying for performance was actually a law, I think Mr. Hesse would be receiving a bill on a yearly basis.

Stay tuned...
On Monday, I'll list the picks for the top five worst CEOs of 2011.

In the meantime, I invite you grab your copy of our latest free report, "The Motley Fool's Top Stock for 2012," in which our analysts have highlighted a company they feel very strongly about in the upcoming year.  

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He doesn't expect to make many friends with this two-part article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of, as well as creating bull call spread positions in, Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that's always looking out for your best interests.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Income Investing

Grow your nest-egg.

View Course »

What is Short Selling?

Make a profit when stocks prices fall.

View Course »