The rich are different from the rest of us not just because they have more money, but also because they get multimillion-dollar bonuses even when they run a company onto the rocks, as did former HP CEO Léo Apotheker. Apotheker was fired from his positions as president and CEO of HP on September 22. The same day, HP announced …
What about Elop?
Nokai has lost more share price under him, both in absolute as in percentage. How big is his severance package gonna be?
If the does not rise to leader of Microsoft after MS buys Nokia and Ballmer retires.
Kallasvuo (whom Elop replaced) was "ousted" (at that level one does not get fired) to the tinkling tune of EUR 4.6M plus 100,000 shares...
(We are getting too used to such figures; do the math to find out how many guys of "normal engineer" level that sum would employ for how long. Hint: >10 guys for >10 years)
I used to wonder about this quaint $1 salary that I'd hear of every once in a while... until I learned that capital gains have a much lower tax rate than wages, at least in the USA. Bastard tax dodgers.
Ah, the Page-Brinn gambit - yet there are those who still cling to belief in the marketing slogan 'Do No Evil'.
But this is exactly what we're shouting about!
The $1 salary is a brilliant way to ensure that a CEO is motivated. If they do badly, they lose - this is exactly what is needed at the banks. Bring them in and give them a shedload of stock and a £1 salary. Bank shares are volatile right now, and probably underpriced in many cases. It's sharp incentive to improve the bank's situation, and the pattern of vesting can encourage long term thinking.
I'll do it
I hereby announce the the HP board that I will take the CEO position when it next becomes vacant and I don't want any stock options, cash will do fine. I can wait, with Meg we're talking... 281 days? Trust me, you'll want me at the helm when it comes time to deal with the liquidation of the company in 21 months.
After Appie's service outage, will Meggie be better?
Gotta say that I would not entirely trust somebody who supports republican Palpatine impersonators and is on an ego trip so hard that she shells out a few tens of millions to make a bid for public office in California, a hive of scum and villany.
That's not a businessperson. That's someone in need of a pharmacist.
But the Apotheker has just left the building. Ha. Ha. Ha.
As "outrages" go this one is mild
I would stipulate that Apotheker didn't run HP onto the rocks. I think the BOD bears more responsibility in this regard then he does. Having said that, Apotheker's brief watch was a major flop. However, this golden parachute is, within limits, is appropriate. Once someone reaches the high thin air of being a candidate for the head spot in a large company like H-P, their concerns should be for soft landings, in particular at H-P where the BOD had already demonstrated their flakiness. I am a great deal more outraged about the "bonuses" received by Wall Street execs as a reward for malfeasance. I don't think Apotheker set out to rape H-P shareholders, though I definitely understand why most of them would feel sore bums.
What are you babbling?
He was FIRED. F-I-R-E-D. My mate got made redundant last week and he didn't get into a week-long negotiation with his employers/golfbuddies to end up with 2-3y worth of pay, he got a months' pay. And my mate didn't halve the company's value while he worked there, he just got laid off with 10% of his colleagues.
Giving one-man losing streak any cent not strictly legally necessary is not doing any good for the company (he's gone, forever, no goodwill to bank on); it's just stealing from your reserves and/or shareholders.
I was once involved in Discovery for a lawsuit
...where a CxO was fired and successfully sued for his expected *BONUS* that year. At the time, his bonus was more than I made annually.
I don't think it's right... but in comparison to prior EDS CEOs (specifically Brown and Rittenmeyer - $30+M and $60+M severance packages, respective, IIRC)... HP got off cheap on Apotheker.
Hell, "firing" for us normal folks (not redundancy) usually means no severance at all. It's an F'ed up world we live in when it comes to this type of stuff, no doubt.
...would a company allow these clauses in contracts of employment?
"We pay you loadsamoney every year we employ you. If we sack you for uselessness, we also pay you loadsamoney."
If demanded by the potential employee, surely that would raise questions about the potential employee?
It's the Old Boys Club - the CEO's effectively decide each others' financial package and have a vested interest in not stopping the Gravy Train.
Just like politicos - no matter how bad a leaders' behavior, his successor will do nothing, just in case they end up in the same position.
Old Boys (& Girls) Club to be sure.
It's a very tight group. Get hired...royaly screw up the company...leave with millions in compensation & bonuses...move onto the next company...and repeat. Over...and over...and over again.
What a world! NOT!
Tired of all this now
Whilst the rest of us have yet another pay-rise free year.
But I spotted a mistake in the Filing
"...reasonable relocation expenses, including return airfare, for Mr. Apotheker and his spouse to France or Belgium"
Should read "single airfare".
Apotheker severance outrage?
So who is outraged in this article?
Clearly anyone with a sense of fairness would be at the very least fleetingly scornful given everything that is going on with the economy, but I can't see anyone mentioned in the article as being outraged about this. Perhaps a better title would be 'HP Board are idiots: $2.4M 'Bonus''. Of course they could all be great pals and are just looking out for each other...
> Of course they could all be great pals and are just looking out for each other
Like the entire bloody "executive class"...
I wonder if they are all acutely, secretly, aware that they don't actually have much in the way of skills or talents and so when one of their number has to go they send them off with the kind of compensation that they would like to see themselves getting when it's their turn to go...
I mean if I was sitting on that board and Leo asked for several million to go my answer would be a flat and simple no, no negotiation. What kind of negotiation skills do these idiots employ?
Board "I'm afraid it isn't working out Leo, we have to let you go."
Leo "ok, Can I have $20 Mil?"
Board "I wish we could Leo, I just don't think we can get away with that much, but we might be able to find you a couple of Mil if we squeeze the shareholders, destroy some product lines and screw the proles a bit more. How does that sound?"
Leo "Awesome and can I have a bunch of the shares that I halved the value of?"
Board: "Sure, they are 10 a penny these days! <all laugh, much back slapping ensues>"
"acutely, secretly, aware that they don't actually have much in the way of skills or talents"
Considering that all most of them do is say "hey, the analysts are telling you that your profit margin is x% too low" so they say "hey, I'll lay off x% of my workforce" (or some similar nonsense) I do think it's high time we offshore those F'ers.
We have armies of call center employees in India that could follow that script, and for *just* a little less than (if you call $12K/year vs. $2M/year "a little") than those monkey suite wearing bobbleheaded yes-men/yes-women do it for.
"he will have a very hard time rising to the CEO position at a big IT"
I wonder how he was able to rise to that position twice... and I am not sure someone else won't be so fool to hire that guy again.
Who gives a shit, really?
He's rich already, no doubt, and he just got 2.4 million for killing HP's share price. Sounds like a comfortable life to me.
New Web Site Test
Let's see if Meg can turn around their disasterous project to try and build a retail website to rival Dell's. They've hired and paid top dollar to head-hunt senior Dell staff but the project is on the rocks - with her online experience at eBay, let's see if she can turn it around - or at least kill it and restart with more competant staff (ie. not just the senior guys form Dell but some who know what they are doing).
Reg.. Can we have a share price chart where the y-axis starts at 0 please. Also, how about a time frame that shows a few years so we can see if the share price drop is part of the usual ups and downs.
This is The Reg, not The Sun.
The Board agreed this - most of the board need to be replaced. The institutional investors who own most of the shares need to act - there is too much back-slapping going on - ultimately the board are responsibe for this sorry period in HP's history.
It must have been a truly monumental fuckup to be worth *that* much!
I didn't even know that there was a dollar value placed on fuckups these days. Is there a published scale of rates? Is it a new thing or am I owed some cash for the more outrageous fuckups I have made in the past?
 Not things like server outages, that's small beer. But there are a couple of truly heroic pig's ears I'd be prepared to highlight on my CV for pecuniary reward.
Appreciated this, gave me a good laugh!
Back in the late 1990s I worked for a very well known telco with a globe logo. They'd headhunted a new top bod from somewhere and had to pay to get him out of his then current job, probably gave him loads of sexy stock options etc and then 9 months later they got rid of him saying that "it didn't work out". I recall that the total compensation package was somewhere around $20m. We had an email explaining all this to us lowly employees.
On the same day we got another email from the UK management saying that we had to cut costs... That didn't go down particularly well.
Annoying that when the top bods go/get shafted etc, they get HUGE payoffs, and we get close to sod all.
Outrageous "pay for performance" Standard of Business Conduct
Agreed, the Board needs to look at themselves as these are the people who hired the guy.
Something is seriously broken in this company's Standard of Business Conduct policy if $2.4M is "paying for performance".
Hire an enterprise CEO
Get an enterprise solution. What did the board expect?
If Whitman carries on with his strategy, then his parachute will be deserved.
In the banking sector just destroying the company is small beer indeed. Ex Northern Rock CEO Applegarth got £2.6 million and he brought a whole business sector to it's knees and nearly the whole country with it.
I don't see how anyone could have done a worse job. They could have used employed a headless chicken as CEO and still have been better off.
Apart from getting an MBA and being a pillock how does one get into this being a crap CEO gig?
This has gone down...
...really well in my HP group. 6 years with no pay rises, and counting...
Be Afraid, be very afraid
OK so HP have a CEO whose bounus will depend on the share price in a couple of years time.
Now what’s the quickest way to boost the share price in 2 years, oh yes, fire staff, cut pay, raid the pension fund, cut R&D, outsource everything, make cheap product using slave^H^H^H^H^Hcheap labour in dakka-dakka land where the slaves^H^H^H^H^H^Hstaff get paid 1$ a day.
When Whitman gets her 63m of share options, she can resign and move to a new job, claiming success in restoring HPs share price……. just before HP collapses totally
Who would stop this kind of outrage from happening?
Would the board be in a position to stop this from happening? They all probably have similar arrangements at their respective "home" companies, so no. The government? Ditto, and egregiously so. Actually the government (i.e. the "representatives" and senators) is worse, because they are in a position to to make the laws, not just avoid them. And they have such golden parachutes as would make a grown (working) man weep.
$2.4M? More like $13M!
My reading of the SEC filing, and it's in the article and *should* be in the headline, is he's getting paid $13M or so in severance payments. Mostly what he's achieved is to do nothing about severing HP from its former customers and former employees.
Verbatim from the SEC filing:
A severance payment in the amount of $7.2 million payable in installments over the next 18 months;
Accelerated vesting of the 156,000 shares of restricted stock granted to Mr. Apotheker pursuant to the terms of the Employment Agreement, such restricted stock having an aggregate value of $3,557,800 based on the per share closing price of HP common stock on the New York Stock Exchange on the Separation Date; and
An annual bonus of $2.4 million under the Hewlett-Packard Company 2005 Pay-for-Results Plan (the “PfR Plan”), reflecting his nearly 11 months of service with HP, payable at the time that payouts are made to other executives of HP for the fiscal year ending October 31, 2011;
With a "pay for performance" package like that, I'd be happy to lose my job too. Where do I apply, I could make just as much of a mess as he did?