It's hard to say what will happen, but the shareholders would be justified in replacing board members over this. Shareholders don't run public companies directly, I think the farthest that you can logically assign blame is with the board.

Did the board fail to minimize total financial impact? In this case, yes. At the same time, adding a "failure" provision to the contract may have scared off good CEOs. I find it unlikely that this CEO has created more value than an overall worse CEO who would have avoided this, but it depends on the outcome of the lawsuits and PR fallout.