Christie Hefner's reign of terror comes to an end

Christie Hefner became the CEO of the company her father started in 1988, and it's been what could charitably be called a disaster for shareholders. Shares of Playboy Enterprises Inc. (NYSE: PLA) closed on Friday at $1.75. The stock traded at more than 5 times that price in the early nineties, impressive given that the company doesn't even pay dividends.

In a press release announcing her departure there was, of course, no mention of that: Hugh noted that " Of course, as her father, my first priority is Christie's happiness. While I will miss her leadership here, I believe that she will go on to achieve even greater personal success."

Awww. Ms. Hefner will remain as CEO until January 31st of 2009, and will stay on the board of directors until a replacement is found.

That a CEO could remain at the helm of a company for 20 years even as shareholder value evaporates is a testament to the power of nepotism in corporate America, and the unwillingness of independent directors to stand up and make changes.

The message for investors is this: Always be skeptical of a CEO who isn't the founder of the company but shares the same last name. It's possible that they really do deserve their title and are brilliant leaders but more likely, the monarchical rule will be to the detriment of long-term shareholders.