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IT Blogwatch

A Daily Digest of IT Blogs from Richi Jennings

HP has "hurd" about a recession

4 comments

TAGS:cut, Hewlett-Packard, HP, HPQ, Mark Hurd, pay, salary
IT TOPICS:Careers, Hardware, Management, Software, Storage

In Friday's IT Blogwatch, Richi Jennings watches HP CEO Mark Hurd impose pay cuts across the board. Not to mention misheard lyrics...

Previously in IT Blogwatch: Economic GOOD NEWS from HP!

Patrick Thibodeau reports:

Hewlett-Packard Co. ... is reducing salaries and cutting back on travel in an effort to avoid being further wounded by the sharp knife of the economic recession.

On Wednesday, HP reported a 13% decline in earnings for its fiscal first quarter ... Instead of making more job cuts now, HP CEO Mark Hurd said during a briefing on the Q1 results yesterday that the company is cutting salaries, "significantly reducing travel" and eliminating or lowering various types of discretionary spending. Hurd himself will take a 20% cut on his $1.45 million base salary, for a reduction of about $290,000.

Kelly Fiveash adds:

Hewlett-Packard workers fired up their PCs this morning to find a long memo from Mark Hurd explaining why he was imposing wide-ranging pay cuts in an effort to prevent further job losses at the computer vendor.The move followed HP’s first quarter earnings report yesterday.
...
It looks like US employees will see their pay packets shrink straightaway, but HP appears to be taking things a bit slower in Europe due to more restrictive labour laws ... Also staff can no longer buy HP shares at a discount ... HP employees have been left spitting feathers.

Owen Thomas wags:

Rather than put more people on the street, Hewlett-Packard CEO Mark Hurd is ... [making] a paycheck experiment never before tried at a company this large ... putting a theory touted for decades in academia into practice at an unprecedented scale. MIT economist Martin Weitzman suggested in the 1980s that instituting pay cuts instead of layoffs could make recessions shorter and less painful.
...
With Congress putting executive pay under the microscope, it's a well-timed publicity stunt ... Hurd himself is taking a $290,000 pay cut, or 20 percent of his salary, which would look more impressive had his pay not risen 31 percent last year.

Mark Hurd is channeled by John Paczkowski:

In an environment like this, there’s no margin for error and no tolerance for inaction ... Analysts and investors [are] going to ask what we’re doing in light of the current environment to right-size these businesses ... I’ll be asked by investors, “Where’s the job action, where are you taking out this roughly, 20,000 positions?” Well, I don’t want to do that. When I look at HP, I don’t see a structural problem of that magnitude.
...
We are fundamentally sound, and when the economy picks up, I want HP to be strong, and to take share and to outgrow the market ... We have decided to further variablize our cost structure by reducing base pay and some benefits across HP ... [but] you could potentially make up the difference with your bonus ... If we get this right, HP can be the kind of company that not only has led, but will extend its leadership.

S. Sadagopan cheers:

Close on the heels of Barry Diller’s Lay Off The Layoffs talk, comes a brilliant note form Mark Hurd. Faced with a deep slowdown and disappointing growth numbers, he highlights the challenges for HP and his plan of action.
...
In an age when the corporate chieftains believe in laying off as a safe and acceptable option, it requires real courage and determination to hold on to your people on changed terms , motivate them to contribute more for a fast recovery and eventual growth. Looks simple but 90% plus organizations do not think that way – they act without class and no doubt – Losers!

But James Governor tilts at this language bastardization:

RT @richi HP CEO Mark Hurd: "We have decided to further variablize our cost structure" Uh, come again? ... WTF???.

And finally...

Obama's Elf
Chicken to Ride

Previously in IT Blogwatch:

Buffer overflow:

Other Computerworld bloggers:

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Richi Jennings is an independent analyst/adviser/consultant, specializing in blogging, email, and spam. A 23 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him on Twitter, pretend to be Richi's friend on Facebook, or just use boring old email: blogwatch@richi.co.uk.

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Our Unethical and Greedy Leaders

Submitted by Mr Ethical on March 3, 2009 - 8:41 A.M.

As a long-term EDSer, I am totally stunned by the corporate greed of our "leaders". While Mark Hurd is unashamedly economical with the truth when he claims he is "taking a 20% pay cut" - knowing fully that he had a hike of over 30% in his base pay last year and receives around 30 times that amount in compensation - but we receive reminders of the importance of our annual training in "Business Ethics"! I have simply run out of words to describe how I feel about our senior leadership.

This is greed pure and simple. If any one of them were to walk into my church, I would want them thrown out immediately. How any of them can hold up their heads knowing that, while they are raking in millions straight into their swollen pockets, they are throwing employees out on the dole, cutting their salaries, freezing their benefits - I will never know.

A "Leader" is someone who "leads by example". I have utter contempt for them now and would not give them the time of day. It's all part of the corporate feeding frenzy that's happening everywhere. Just look at the even greedier banks who take the "loans" from Government and use them to prop up their own personal bank accounts instead of helping desperate businesses and home owners.

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HP Pay Cuts - an unfair act of economic oportunism and greed.

Submitted by Damian on February 26, 2009 - 8:00 P.M.

Since when has making 1.9 Billion dollars net profit in a little over 12 weeks been a legitimate excuse to cut the salaries of hundreds of thousands of people world wide? I would suggest never in a million years, Mark Hurd has revealed his true colors with this one.

We need to put Mark Hurd’s 20% salary cut into perspective, remember he is only taking a cut to his base salary ($1,450,000) which amounts to a $290,000 drop. Seems quite reasonable until you examine the following, publicly available, information.

* Mark Hurd’s total compensation in 2008 was $42,514,524
* His compensation in fiscal year 2007 was $25,253,461 - so, by my calculations a 68% increase in the total package from 2007 to 2008.
* He also exercised $10 million worth of stock options and had $15.7 million worth of HP stock vest during the 2008 period
* His compensation package includes approximately $738,000 worth of additional compensation;

* Personal and home security - $256,000
* Personal use of HP’s corporate jet - $135,734 (you have to love that don’t you?)
* $71,000 in mortgage subsidy he is guaranteed for relocation expenses under his employment agreement.

6 people at the top of the HP pyramid accounted for $142,774,325 in compensation in 2008 alone. That is an obscene amount of money.

Time to say enough is enough.

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Mark Hurd and HP spin-doctors are lying

Submitted by Aussie EDSer on February 25, 2009 - 12:33 A.M.

Mark Hurd is 100% spinning everybody a lie! Go to this US Securities Commission link: http://www.corporate-ir.net/seccapsule/seccapsule.asp?m=f&c=71087&fid=6113954&dc=

Go to page 3. You will see his 20% cut to his BASE PAY will be 0.69% of the overall total. He will still make over $40 million USD in bonuses and share options. This is obscene. Nero fiddling with the facts. Nobody here in Australia will be signing off on 5% cuts. Considering EDSers haven't had a pay rise in over 2 years, what to management expect?? Once the recession is over, hundreds will be jumping ship!

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Marc Hurd is lying

Submitted by Marc Turd on February 23, 2009 - 9:12 A.M.

Mark Hurd offers to take a 20% cut of his base pay. All other emplyees will loose 2.5 to 5%. But... 20% of his base pay ($1,450,000) is $290,000. His total compensations and bonuses in 2008 were $42,514,524, that makes $290,000 less than ONE percent. And he still has a company car, company plane, company meals, free pension fund, free insurance etc.
Employees get NO job garantee once they agree to cut 5%. The CEO doesn't even say that this will be a temporary measure. Doesn't that smell like a giant pile of BS?

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