Larry tends to be very loyal to his lieutenants. I'd say this is a combination of 1.) his personality type 2.) that you have to be, in order to get people to work for you when it's clear that you aren't going to step aside any time soon and 3.) his long-term orientation, where he's willing to endure a lot of temporary hiccups with the faith that people will eventually get the job done.

All of these are positive character traits, but they also mean that some...well...sociopathic individuals have managed to gain his trust and hold it for long periods of time, doing significant damage to the organization in the process. In the past, he has eventually fixed things, it just took years.

It's hard to say that this is wrong, per se, since the alternative is often a slash-and-burn CEO that axes executives at the first sign of trouble in their divisions. You can't do anything long-term under those conditions either.