Mark Hurd’s tenure as HP’s CEO continues to raise a passionate response. It’s almost one year since I wrote my original post about HP under Mark Hurd called HP Pay Cuts – an unfair act of economic opportunism and greed so with that, and approximately 1300 comments later, I think its fitting to round out the conversation with a look at HP’s SEC filing for 2009.
I have no intention of continuing to write about HP or Mark Hurd from this point on, all I’ve wanted to say has been said in previous articles, and I want to write about more interesting subjects. The HP, Mark Hurd situation is not an isolated issue, it’s symptomatic of a bigger problem with Corporations in general, and it will take a lot more than a few blogs from me to make any difference.
Lets have a look at the salient points of the SEC filing.
- Mark Hurd, Chairman of the Board, Chief Executive Officer and President (the guy that makes the decisions, approves them and, supposedly, keeps them honest, all rolled into one), earned total compensation of $32, 332, 527 in 2009. When you look at it further it’s interesting to note this includes over $400,000 for 401k company matching, personal use of HP’s corporate jet, and security. Update: Also check out
- Catherine Lesjak, Executive Vice President and Chief Financial Officer, earned total compensation of $7,585,775, including over $200,000 in 401k matching, security, and personal use of the HP Corporate Jet.
- Ann Livermore, Executive Vice President, HP Enterprise Business, took home $13,424,406 in including around $184,000 in 401k matching, security and personal use of the corporate jet.
- R. Todd Bradley, Executive Vice President, Personal Systems Group, $12,538,329 in his personal coffers including about $248,000 in 401k matching, relocation expenses, personal use of the company jet, and security.
- Vyomesh I. Joshi, Executive Vice President, Imaging and Printing Group, a package of $11,644,691 including $183,000 odd of 401k matching, security services and use of the corporate jet.
Update: Mark Hurd also cashed in aproximately $11m in share options during 2009, check out Yahoo Finance HPQ Insider Transactions for the specifics. (thanks to a comenter on this post).
There we have it, Mark Hurd and four other people in HP took home $75,525,728 in 2009. Admittedly it was significantly less than the previous year, but if you consider the circumstances, and what they stooped to to "earn" it, it’s still questionable, which ever way you slice and dice it.
I invite you to read the SEC filing, it makes interesting reading in terms of the executive compensation in HP’s peer group of companies, and the "performance" based compensation scheme.
When I look at it I can’t see any real top line "performance" at all, just, in my opinion, a company that’s exploiting it’s employees, compromising Customer service through its best shoring program, and that has sold out on it’s corporate values, all for the sake of putting shareholders first.
I think it’s only a matter of time before people more significant than me start asking Mark Hurd hard questions about real growth, rather than the illusion caused by acquiring and consuming other companies. In the meantime we, as consumers and/or employees can vote with the two most tangible things we have, our labor, and our chequebooks.
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Ah, VoW…it may be a voice but management only hear what they want to hear, then emphasise the positives and ‘cherry pick’ the easy stuff from the rest so they can say ‘we listened, here’s how we responded’ whilst resolutely ignoring the elephant in the room.
How to improve morale at HP? Start with a pay rise for the rank and file…it wouldn’t have to be much; even 2% would help. Perhaps a couple of the senior exec could forgo a bonus this year to fund it.
I came across this web site:
http://hpphenom.blogspot.com/2010/08/holy-mackeral.html
which claims that the latest VOW (Voice of the Workforce) survey done last April shows that 2/3 of HP’s workforce would leave in an instant if they could find a job with comparable salary/benefits.
I was let go a few years ago and I recall always ticking off yes when it came to that question. I forget what percentage of people back then would leave HP for the same salary/benefits but I know it was quite high.
Most decent companies would be aghast at such an incredibly high number, but not HP. How can any company go anywhere with such a massive morale problem? I recall talking to fellow HP employees in two different countries and everyone of them told me that they wished the high tech industry would pick up so they could leave HP.
We all know that the “HP Way” has been dead for some time but know HP has lost its way. I have no idea how anyone could possible do anything to improve morale at HP (perhaps HP employees could organize themselves and form a union to protect their interests).
I’d say extremely naive. When you consider that nothing, no decision, ever stopped Mark Hurd from reducing the workforce, or moving it offshore.
What ideas?
“..these decisions make the difference at the end of the month and prevent you to reduce the work force of the company”.
Extremely short sighted. Great business man? His ideas will keep HP in the top Fortune 100 ? Are you serious ?
Everything CH says is true. Any old EDSer could write almost the same story. I left EDS in 2000 for the other 3-letter company, I Been Moved, for what I thought were greener pastures. After seven years with NO raises or bonuses I had enough and came back to EDS, who gleefully took me back. It’s been another four years of NO raises or bonuses, despite being a technical leader, the go-to person to get the work done. And in the end a wonderful 5 percent decrease in pay just to pay the likes of the Dark Turd who did nothing to increase business(not counting buying EDS), but to simply cut people and salaries to show a profit while skimming off the top and riding the backs of all the people in the trenches. All this while HP is in the midst of cutting 9,000 more people and building new datacenters off shore. While the costs may be cheaper, the service provided will tank due to the lack of experience. Ross Perot started EDS with $1,000. If we get enough people together with a spare $10.00, perhaps we could build a new EDS… but then, who has a spare $10.00 today?
this is the Gary Budzinski video i find online. Where he talks about monitor who does and who does not take pay cut outside USA. I think this is against the law, no? http://www.youtube.com/watch?v=TmK8qfd4lSs
My experience with EDS tells me that very few senior managers could stand by their expense statements if an independent review were conducted over the past year. With frozen salaries, the expense system has been used to top up salaries for many years. What I find hypocritical is that the likes of Hurd and Dick Brown can be the hypocrites they are, have the awful reputations they have, destroy morale and customer confidence as they both have, and yet receive huge payoffs when they are asked to leave. If an employee was caught stealing from expenses, they sure wouldnt be getting generous hand shakes to leave. A real poke in the eye for employees.
This is great news. It is also further proof of the ridiculous concept of pay for performance. We all have seen instance after instance of execs that fail (let alone lie and steal!) get paid. It is a bit ridiculous. Is it a big surprise that Hurd screwed employees over in his tenure? He betrayed his wife and kids and probably could care less. He is entitled you know…
I foolishly (in hindsight) left a job at a University for EDS in early 2001. I had dollar signs in my eyes and figured I had to give the “corporate” world a try. Shortly after I arrived the pay increase freezes started. I recall sitting in a meeting with my manager and receiving my perpetual “meets expectations” rating. I asked her what I needed to do to be rated higher. I feigned interest while she gave me some canned BS answer. I then told her that as far as I was concerned I would always be “meets expectations”. I said that I have good skills and already work as much as I was going to work. She looked kind of surprised and just said 'OK'. BTW, she was a terrible manager. She managed through fear and intimidation mostly. If someone had a good idea they automatically owned it. There was no consideration to their current workload or if it fit their skills. I and others stopped raising our hands when they had a good idea and a full plate. This management technique is a sure way to stifle creativity and it did. We all thought things were bad at EDS compensation wise from 2001-2008. The takeover of EDS in 2008 by HP made the EDS days seem like utopia. The pay/benefit/workforce cuts were/are constant. The one I found most amusing was the freezing of the EDS retirement benefit. It was replaced with a more generous 401k match that was highly touted by management. The 401k policy was promptly changed only a few months later to not be a guaranteed amount. It is dependent on company performance. This also allows them to not pay out until the end of the quarter once a decision is made on performance. I figured the next step would be to make regular pay variable based on company performance. I/We did get the 5% cut and others got much more of a cut due to a re-classification to HP job bands. I know of an individual whose pay was severely cut because they went from a tech band to a non-tech band. A few months later they were moved to a technical position because it was in the best interest of the project. Of course, no pay increase for doing a technical job. The erosion of benefits will continue I'm sure.
Good news is that I was able to work with some great people over the years. The manager I had most of those years is a great person and manager. The better news is that I am now back at work at the University I left in 2001. My “old job” opened up and I interviewed well and was re-hired. I make much less but EVRYTHING ELSE is much better. From the benefits to actually working with people face to face it is much more pleasant. I know I will not be let go so the CEO can make his numbers this quarter and get a bigger bonus. If I get let go, it will be because there is just not the money to pay my salary after all options are exhausted. I can live a lot easier with that reality. Funny, I goto work at 6:00-6:30 and leave after 5:00 generally these days. Putting more time in at work than I have in years. FOR LESS MONEY! I guess I should thank EDS and especially HP. You've reinforced what is really important to me. Making a living and enjoying it. Feeling like I'm contributing to the community and not just execs bonuses.
Later and thanks to listening to my disjointed thoughts.
Are you the whore who slept with him? Give me a break! “…a great business man….” How can you justify his compensation package while at the same time laying off thousands of employees? Jackass!
I agree with Jim. Mark Hurd should be facing criminal prosecution at request of HP's board and top management, not receiving any money for severance from HP. If the HP board has a conflict of interest in prosecution, then my question is “why?” HP shareholders (which I am one) are disgusted. Bottom line this company and board needs to shape up and quit pandering to executives like Mark Hurd who break the law (covering up, watering down, and dismissing their transgressions).
Hurd should be prosecuted. He stole from the company and stockholders.
There's a big difference between 'cutting costs' and shutting down buildings, making people work from home, pay for their own Internet, telephone, paper,pencils.
Also, there was NO 'intelligence' on the cost cutting, merely a %.
We cut,cut ,cut until our CUSTOMERS tell us – we're tired of this – you need
to hire some more people…or we're walking
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