Infamous Businessman

“The 3rd Worst CEO of All Time“
-Conde Nast Portfolio

Kenneth Lay had one of the most meteoric rises and falls… of all time. Lay was a brilliant businessman who built the Enron Corporation into one of the biggest companies in United States history. But he also presided over its collapse as 20,000 workers lost their jobs in the largest bankruptcy in U.S. history, as well. At the pinnacle of his career, he was heralded as a “visionary”, but died as a “scoundrel.”

Early Years

Kenneth Lee Lay was born on April 15, 1942, the son of a Baptist preacher. He was born in the small town of Tyrone, which is in south-central Missouri, but spent his formative years in mid-Missouri where he attended Hickman High School in Columbia.

He stayed close to home for college, attending the University of Missouri – Columbia, where he earned bachelor’s and master’s degrees in Economics in successive years, 1964 and 1965.

Rise To Fame

His next stop after college was Houston where he worked for an oil company while also pursing his doctorate degree. He left the business world for a time to serve in the U.S. Navy
as a financial analyst and energy deputy in a high-level position in the armed services.

Kenneth Lay had already proven himself as a brilliant mind in the energy sector by the time he was in his younger 30’s. So, he left the government sector job in the Navy for a position with the Florida Gas Company in Winter Park, Florida It wasn’t long before his hard work ethic, vast experience, and book smarts paid off as he became the president of Continental Resources Company. He parlayed that job into a larger CEO role with Houston Natural Gas Company, which eventually became known as Enron.

Show Me Success

Kenneth Lay was on top of the business world by the time he was in his mid-40’s. He was the Chairman and Chief Executive Officer of a company that was expanding rapidly in the lucrative field of natural gas and electricity. He grew the company to become the seventh largest company in the United States at one point. But this exciting business sector came with a lot of risk and a big cost.

In the mid-1980’s, it seemed that everything Lay touched had turned to gold. He was busy transforming Enron from a pipeline business company, to primarily an energy trading company. He was also getting politically active during his ascent, becoming a co-chairman of the re-election committee for George H.W. Bush.

All of that led him to be one of the most powerful business leaders and political insiders in the country at the time. In 1999, his personal compensation was more than $42 million annually as he was in the midst of liquidating $300 million in Enron stock as well.

Show Me Failure and Fraud

Cracks in the business began to be seen around the year 2000. In 2001, the business began to fall apart as accounting scandals were uncovered and the company faced a daily onslaught of negative press. Many aspects of the business were hidden from investigators and auditors due to the complex nature of the industry, leading to the largest bankruptcy in U.S. history. By the time the dust settled, and the extent of wrongdoing had been unearthed, 20,000 Enron employees were out of jobs, many of whom had also lost their life savings. It also led to the destruction of the Arthur Anderson accounting firm who was accused of being complicit with the illegal activities taking place at Enron.

Lay was indicted, then convicted on multiple counts of conspiracy and fraud. He was awaiting sentencing when he died on vacation in Colorado in 2006 due to a heart attack. More than one thousand people attended Lay’s funeral. But even in death, he generated controversy. He was eulogized as a ‘moral man’ who was destroyed by his enemies, while former employees sued his estate to try and recoup some of what they lost.

Extra! Extra!

• After his death, his conviction was vacated because he died before sentencing.
• Prior to his death, Kenneth Lay donated more than $1 million to Mizzou. That led to the Kenneth Lay Chair in Economics.
• President George W. Bush attended Lay’s funeral.