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.