Even now, nobody is connecting the dots when it comes to Gary Wendt's role in the demise of Conseco. Most reports about Tuesday's bankruptcy filing by the Carmel, Ind., insurance and lending behemoth have suggested that the former CEO's turnaround plan was more or less doomed from the start. The assumption appears to be that, given the large debt load taken on by previous management, Conseco was too sick to be cured even by Wendt -- who joined the company in June 2000 with one of the most impressive reputations in corporate America. But if the popular myth is that Wendt was overwhelmed by an insoluble mess, a look at some before-and-after numbers suggests otherwise. Indeed, rather than overseeing a sharply focused belt-tightening, the Wendt regime appears to have added to the cash-crunched company's many problems. His massive pay package and his apparent reluctance to cut back on Conseco's most wretched business excesses -- including making loans to borrowers with the shakiest of credit histories -- certainly did not guide Conseco on the promised path toward recovery. Indeed, they may have hastened the collapse. Conseco didn't immediately return a call seeking comment.
Why care about how much Wendt is to blame? Because so often investors hitch their wagons to star CEOs conducting turnarounds, only to see their investments wilt when the corporate messiah fails to follow through. Take a look at what's going on right now at Tyco ( TYC). There, ex- Motorola executive Ed Breen is trying to rescue the wheezing debt-laden conglomerate, but many skeptics don't believe he can do it, despite a sharp run-up in the stock. The hopes built into Wendt were similarly ardent. Conseco's stock soared to over $20 from under $5 in the months after the executive came on board. It now trades for pennies.