Don’t cry for Hurd, Hewlett-Packard; CEO’s pay cut 20% amid sales slowdown

hp-logo-blue1If job anxiety has a sound, it just got louder in Silicon Valley today when its largest company reported an unexpectedly dramatic slowdown in sales for its fiscal 2009 first quarter. One result is that the company is “reducing base pay and certain benefits across the company” beginning this quarter, according to remarks Cathie Lesjak made on the company’s earnings conference call this afternoon.

After the call was over, HP distributed more details of the pay reductions, including a 20 percent cut in base pay for its chief executive, Mark Hurd. Based on the $1.4 million salary he was paid last year, that amounts to a cut of $280,000. That amounts to a rounding error compared with the $42 million Hurd collected in total compensation last year.

Members of HP’s executive council will see their base pay cut 15 percent, with gradually smaller reductions made down to a 2.5 percent cut in the pay of non-exempt wage earners. The company is also capping its 401(k) match at 4 percent and ending the practice of selling shares to employees at a discount in its stock ownership plan.

Those steps, however, are not expected to do the trick on their own. “We need to do something more about our cost structure,” Lesjak is quoted in an interview reported by Bloomberg News. “We’re looking at the first quarter results and saying let’s model that that will continue for the rest of the year.”

One major reason for the decline in sales was a 19 percent drop in revenue from the company’s cash cow, the imaging and printing group. As CEO Hurd put it in the company’s conference call, “when you don’t have a job you’re not printing as much, is typically how it works.”

If you’re in the market for a printer, you might want to pay close attention. Lesjak, in speaking about challenges with inventory in the printing group said, “we need to get that inventory down.”

The company is still generating a whole lot of cash, enough so that it could spend another $1.2 billion buying up 34 million of its shares. Those shares, which lost 21.5 percent of their value in the last quarter, that got even cheaper in after-hours trading: down $1.94, or 5.7 percent, to $32.14 as of 4 p.m., according to data found on Yahoo Finance.

 

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  • MarkTurder

    It just keeps getting worse. Employee paycuts when the company is still growing?? WTF?

  • hpemployee

    20% paycut what a jerk!! I’ve been at HP for three years with no raise.
    Why are you still taking a salary Mr. Turd?

  • jazz man

    first they weeded out all the older employees with 20-30 yrs service because HP was still paying into their retirement. I got laid off with almost 31yrs service, never out sick, always on-call, merit raises and excellent evaluations but put in that notorious middle ranking band (like 99% of the employees were)

    I got laid off over 3 yrs ago, found a job after 6months of looking (I was the lucky one).

    so Mr. Turd (I mean Hurd), your pay should be set to 0 because of what you got in bennies last year. you are a jerk, along side fiorina

    God help the indiviual contributors that are left

  • Scott

    I work for HP. A 20% paycut for Mark Hurd is no big deal. He and all the other executives make most of their money on bonuses, which won’t be affected.

    Let’s see… HP said he had $40+ million dollars in compensation in 2008, but Mark’s salary is only like $1.4 million dollars. I don’t think he’ll even notice that 20% of 1.4 million.

    Meanwhile, some of the rest of us haven’t seen raises in years. Will we get that 5% back when things turn around? Will our 401k matching come back when the economy is better?

    None of us is stupid. This is just an excuse to give the employees the shaft.

  • hpemployee2

    Agreed, Hurd the Turd should take no salary for the rest of this year.

    Another thing which irks me is that the U.S. employees are shouldering most of the burden. Due to European labor and union laws, their salaries can not be cut. Those employees would have to “volunteer” to take a pay cut. Oh yeah, like I see that happening!

  • UK-HP-MAN

    European workers are being told that the cuts is to in initiated starting with management at this time, however, if you were offered the choice, would you ‘like’ say yes?

    I think they would be sensible to hold out for at least a reinstatement of a 5% cut at a future date, who does it benefit when the company is in better times apart from….OH YEAH, the shareholders. Tell me, what did they sacrifice again?

  • Tech Support Specialist

    Now you know what HP really stands for if you’re one of the serfs… “Hardly Pays”.

    I also worked for the previous company Hurd canabalized. If you think you are being screwed now, just wait.

    The real story should be “HP Invents… Time Machine!” My hourly rate, at least, keeps going back farther and farther in time.

  • Fred Smith

    In response to my US colleague – get your facts right chap. I work in services in Europe for the company that laid of loads of its people before HP bought it. Then HP made all those cuts in the last month – the majority being in the services (EDS) part – the very part that is making huge profits. Europe is a two tier system and the UK took most of the hit as we , like the US have no protection. By the way – the majority of these profits were from Europe not USA. So the Services, EDS and TSG are propping up the rest of HP. Shrewd investment buying EDS as if they hadnt a lot more HP people may have had to go as you wouldnt have the billions of EDS profit dollars to save you. I have also had an unnofficial word from a manager that if you dont accept the ‘voluntary’ pay cut when it comes, you will be first out of the door when the redundancies come.

  • Uk Worker

    I work for EDS, “an HP company” in the UK, and I feel sorry for you guys in the US getting pay cuts with no choice. No one in their right mind will opt for a pay cut here. Taking a pay cut does not mean they won’t make you redundant later, it just means you’ll be cheaper to pay off when you go. Mark Hurd is a total shit, He is taking advantage of the credit crunch to reduce wages, which will never go back up, no matter how long you work for or how much money the company makes.

  • Michelle

    It took me years to get that 5% more in income. I feel like I’m back 6 or 7 years. When will this end?

  • Iluminatus emploee

    HP – half paid….

  • From HP europe

    Funny to see the announcement which affects the salary (even though we in EUROPE will have to volonteer…. Ha Ha) BUT not the bonus plan. So the salaries will be cut, so the company can make profit, so the executives can have bonus. ???

    This is correct that in Europe we will have to CONSENT to the cut… but we have been told already that the management will know about so ….

  • Caring Mom

    My son is employed at HP. He is a single father supporting 2 children. He gets very little child support. Mr Hurd, how do you expect him to keep supporting these children on what you pay? Why don’t you take your big salary and divide it among your lowest paid emplees for a while. Or, better yet, you try to live on the measly amount you pay others.

  • HP Employee

    I have been with HP for over ten years at the Corvallis site. Right now we are going through another string of WFR’s (workforce reduction) which will repete again every six months. Turd and his cronies are only concerned about how the company looks on paper.

    The Corvallis site was the birth place of inkjet, it is now just an empty shell. The bean counters have moved everyone who is left into one building. This is a site with 11 buildings that are now going up for lease. Turd has reduced HP to just a logo that is put on products that comes from the lowest bidding vendor.

    Corperate Greed

  • HP_Employee

    I have worked for HP for 10 years now. The company today is SO different from the one I really wanted to work for. It has been years since I have seen a raise. I lost my company car because I drive to the airport more than to see local customers so I had to buy a car last year for the first time in 9 years. I have not seen a stock option or bonus in about 7 years. If I thought this was truly a shared sacrifice that would help I am OK with the 5% cut in my pay. But allowing bonuses that only benefit management is absurd!

    I agree with the others. HP has turned into a company that will eat up and spit out it’s employees so that management can hit their metrics and get bonuses. I don’t think it’s sustainable but who knows. I need a job and there isn’t that much out there.

  • Another HP Employee

    Had Hurd sent out an accurate e-mail to employees it would have read “My take in 2009 will be reduced by .67 percent.”

    Hurd asks for greater sacrifices on the part of his workers than he asks on himself. That’s the kind of business environment we are trying to work in.

  • HP_Field_Support_Employee

    I had contracted for HP for over 10yrs, finally becoming an actual HP employee 2.5 yrs ago. Worst decision I ever made. 2007, one of HP’s best years ever…no raise. 2008. So so year, of course no raise. Now this paycut when we are still showing profit in tough times. Guess I should say thanks for putting me in a financial category where I can get reduced lunches at my childrens school.
    Those of us in cities with no local office, were having our internet and home phone paid for us for company use. I know I didn’t use the phone much for work, but always used my internet connection since it was more efficient and way more reliable than the sprint card provided with my laptop. I also considered it a wash since I was providing space, electricity, etc for HP to use my home as an office. That was cut in January when HP went to a cell phone plan and we were told to used the laptop wireless cards and if we chose to keep our internet connection and phone and used them for company use, that was our call as they we now “tools of doing the job”. That one cost me $75 a month and was the first paycut. I do still need to provide space, electricity, etc to operate this equipment defined now as “tools for doing my job”.
    If you figure in cost of living and the extra expenses coupled with no raises and now paycuts, I am not sure what the actually total paycut is. Could be close to the CEO 20%
    I do not feel for you, Mr Hurd, regading the salary decrease since it is not affecting your bonus, which is many times my annual salary. You are NOT doing you part for the better of HP in the long term. You will however have your golden parachute.
    Here is a site to look at.
    http://www.hp.com/hpinfo/abouthp/corpobj.html
    For those of us inside HP, we know “The HP Way” and what it is supposed to mean. It was put forth by Bill Hewlett and Dave Packard and by todays standard, is only a means to put some words together. Basically, it is supposed to be our values toward customers, company, and employees. The current HP Way is company only and as a result, Mr. Hurd’s, and upper level managment’s pocket. As little as 6-7yrs ago, our support structure was very customer oriented and I was proud to be a part of that. I was told, by customers, that yes HP has a good product, but the combination of the support with the product kept them coming back. I received fair pay for my work and was happy with that. To be honest with you, it is embarrasing to work in the support side and always having to apologize (without actually apologizing since we are not to do that) to customers for delays and headaches they were caused trying to get onsight support. We also run into problems with the support we are provided. I have been doing this for over 10yrs, know my products and know my abilities and do the best with what I have, but I know it could, and believe it should be better.

  • HalfPaidEngineer

    Caring Mom, I’m right with your son in spirit… As a Single mom with 2 children full time and no child support, a mandatory 5% paycut amounts to us having to move from our current apartment to a cheaper one further out from the city. There are no cheaper choices and I’m left worrying about how we’ll make it if I have the longer commute. Also concerned as to where I’ll find the TIME it takes to move as HP has me working 6 days a week and on-call that 7th day.

    Looking for a new position is an option (if there’s anything to be found), but in doing so I’m leaving a great group with fantastic profits in a bad position as we’ve already lost 1/3 of our people at a time we needed to be hiring.

  • MrCapitalistChangingHisMind

    Hi All

    I am in HP Europe. I have worked hard for 10 years. I was a company man. But I have begun to study economics and am reading a little more widely. Did you know that in the last 20 years the real income increase of engineers and technical staff has DROPPED ~2%. What about senior executives? INCREASED ~100%. What about the top echelons? INCREASED ~500+%. This is the disgrace that we face. Turd’s decrease is a joke – 280K/42Million= approx 1%. This kind of filthy, abominable inequity preceded the French Revolution. We can only pray that a similar (if less violent!) reaction comes into being for the good of society.
    Shame on you and your ilk Mr. Hurd.

    Shame on you.

  • DisgustedEDSer

    I am an EDS employee, have been for several years – before the purchase by HP, EDS was a great place to work (not everyone would agree with that, but I certainly think so). Since the purchase, EDS has been ripped apart, stomped on and battered, only to be the highest performing group in the HP group of businesses…

    Now to add insult to injury, they want to take whats left of us and cut our salaries..

    Mr. Hurd, and your ‘executive team’ take a good look in the mirror – think about what you are doing to hundreads of thousands of employees… mothers and fathers, struggeling to survive.. you have no idea, because you are so out of touch with the real world!

    Number 1 rule to great company management is to protect your best assests… and for EDS, it’s assets are its people, not products… we are a services company, not a factory of plastic and electronics..

    Thankfully, I won’t have to put up with this poor management and corporate greed much longer, I am one of the lucky ones who has resigned…

  • I would like to re-iterate what #8 (Fred Smith) said above:

    Over the next couple weeks, most likely starting in mid-April ’09, a HR questionnaire will be sent to all HP employees from HR Operations (HP EMEA & HP APJ) (including HP GDAS employees) where 1 single question (typically a YES/NO type) will determine your future career and possibly fate at HP.

    1) The link to the questionnaire contained within the e-mail sent to your HP work e-mail address (for those on projects this may be your client-side e-mail address) will take you to the @hp portal which will require your login credentials before displaying you the questionnaire (your login credentials point to your HP Employee ID and related attributes)

    2) The question will read somewhere along the lines of – will you provide your consent and support to voluntarily take a pay cut on your base salary, as part of HP’s global initiative to cut costs and work effectively and efficiently during the on-going economic crisis.

    3) If you choose to select the response as ‘NO’ and upon submitting the questionaire, you will be displayed with a thank you message, and your Employee ID will be communicated to WorkForce Management (WFM) where your ID will be included into the WFM Reduction Programme.

    4) If you’re still interested in having some sort of job security or at least a job through out 2009 if you have exhausted all other options, select ‘YES’ as the response.

    My source is a Manager 2 HP employee

  • UK Worker

    As they are now into saving money rather than cutting headcount, I hope a full review of contractors will be undertaken at the same time and their pay cut by 5% as well as the loyal permanent employees

  • No HP Employee

    HP-Hurt People…that’s what its stands for.
    How sad, to see that HP is spitting into the wale it is drinking from…
    Spitting over its people that are the ones who contributed and made it as big as it is.
    Led by Mr. Turds and Co. who only see their own individual benefit, won’t even feel the difference with 20% less in base salary. By implementing the salary cuts /Staff costs, Hurd is actually assuring to receive his nice bonus. SO UGLY, especially that HP is still earning money!!!!!!!!!
    So now that they cut salary costs, they should give its employees more holidays days, no?
    Advise to all of you…try to jump from the boat before it sinks!

  • HP EDS Transition Employee

    I work in Canada and we also received the news last week that our wages would be reduced. Many of us have not seen a bonus in many years and any pay raises that have been given are insignificant. They certainly have not kept up with the cost of living.
    When are the governing authorities on both sides of the border going to step up to the plate and put all these CEOs in jail where they belong? They can legally tear apart companies, put thousands of people out of work and then take mega bonuses for a job well done. How many executives over the past 10 years have taken huge incentive bonuses and then been given large buyout packages to leave the company (do you remember Dick Brown, Ron Rittenmeyer just to name a few)? We have no choice but to stand down while these thieves rape and pillage what were once good companies while they walk away with massive amounts of money.
    HP (EDS) is not the first company that this has happened to and it probably won’t be the last. Executives making the decisions receive bonus and incentive packages that could otherwise be used to keep jobs or keep our wages intact.
    I consistently get good peer and customer reviews but my salary certainly does not match those reviews. Neither is my salary keeping up with other professionals in the same job at other companies. Expectations are much greater, but compensation is not matching the ever increasing responsibility that our managers are placing upon us. Unfortunately, I have too many years in to give up on my job at this point. Now we are hit with a pay decrease, which I am sure none of us will ever completely recover from. Not to mention that our pension will also be affected by this unilateral corporate decision. The executives making these decisions have no clue what it is like to live on the wages they are providing, let alone live on what is left after the cut. It is difficult to raise a family on our current wages, let alone what will happen when the cut is initiated.
    I would have some respect for Mark Hurd and his band of cutthroats if they made the decision to give back the huge bonus and incentive packages that they received in 2008. The 20% decrease in wage which would amount to $280,000 is nothing compared to all the other money he made last year. Are we supposed to feel that he made a great gesture by giving up 20%? What a joke!!!!
    The sad part of all of this is that if we continue to lose jobs or have our income drop then there will not be any money to buy their product anyway. Is this what they want? But things being what they are I am sure he will get another huge bonus for his fine work in reducing costs. This is yet another fine example of the rich feeding the rich…corporate America at its very best.

  • Nick

    I read Brandons column and I found it all to bland and without any insight or depth. In particular I found the graph of sales growth and sales very interesting in that it is blatantly obvious to anyone who has been in the business world that Mark Hurd and his band of executives booked everything they could in the fourth quarter to insure that they received an extremely high bonus. Get real HP executives made more on stuffing the fourth quarter than the entire salary for their new fiscal year. This makes the 20% pay cut somewhat of a joke albeit a sad joke. AS an HP stock holder I am miffed as to how anyone who receives a compensation in excess of 25 million and their result is a 50% reduction in stock price over the last year and keeps their job.

  • john doe

    Funny post and snappy dialogue from Apollo Creed on another site http://forums.whirlpool.net.au/forum-replies-archive.cfm/1147564.html

    ~Doug~ writes…
    I can see there is 3. A) Quit. B) Take the pay cut. or C) don’t take the pay cut but risk losing your job anyway.

    You keep getting option B completely wrong:
    A) Quit
    B) Take the pay cut AND GET FIRED ANYWAY (added piece in CAPS!).
    C) Don’t take the pay cut but risk losing your job

    You should always take option C. At least if you get fired, you will have a higher payout.

  • Former EDS HP Dad

    I had worked over 20 years for EDS. My reviews always excellent. And I weathered many downsizings over the years. EDS laid me off as a “reduction in workforce” 3 months ago. Finding a job is near impossible right now. Basically my
    job was shipped to India, and that worker is now a Slumdog Millionaire.

    I am a single-widowed father raising 3 kids. Money is running out,
    and we could be penniless by summer. Due to the short-sightness
    of Mr Turd and other CEOs the USA is going to hell in a handbasket.

    Stop sending jobs overseas – we need the work here!

  • Number One GI

    let’s all move to some remote forrest, start a communist country and we’ll grow potatoes to survive!

    wow, what a one sided list of comments. it’s almost as if someone is filtering the comments so that they only agree with the writer of this article.

    i work for hp…. and in my group everyone is doing just fine, so long as we still have jobs. sure we might joke about that 5% a little… but the crying and whining is no way near what i’m reading here.

    so what if mark tried to pull the wool over our eyes with the 20% cut! small mistake on his part. if i were ceo, i’d cut everyone straight across the board at 10%… including myself… with the bonus game still on. if i could keep the majority of the business intact and execute a good game plan, i’d hope for 40 mill in bonus and options too!

  • EDS Belgium

    Hey, dear US colleagues, I can understand that some of you are a bit frustrated as Europe has the possibility to volunteer thanks to trade unions, laws, etc. But plse be aware: the strategy should not be to take away good things from 1 site but to try to get it for other locations too. And in this case, given indeed the bonus situation of our CEO, I’m glad we cannot be forced to participate. Kind regards.

  • HP EDS Transition employee

    A company is made by people, driven by the joy they find in the work they do. Management should follow a path that make sure the company does not loose his soul, his backbone. Today most former EDS people lost their joy and believe in the company, and this affects the soul of the company. This is caused by a few individuals who already lost their soul in the dollar pit, and has only one drive ‘fill their pockets. I hope many people will react and make this wish together with me, ‘sooner or later Hurd will hurt himself’!

  • john doe

    sorry number 1 GI you’re a bit of a fool I fear. You actually believe Turdy gives a rat’s ass about anything more than the depths he can plumb in his own feeding trough. The “small mistake” is just him having a giggle with the drones as he plays with their lives. Silly boy – you must be quite young?

  • Number One GI

    john doe, i’m not sure how on earth you would extrapolate me thinking hurd cares about me and my paycheck based on my comments… i’m pretty sure hurd is laughing his ass all the way to the bank and he’s trying to mop up lazy asses like you so he can continue to do so.

    i believe hurd is a businessman and in business you look out for yourself. me a fool… haha… maybe… yet i’m not the one pouting about how boo hoo hoo ‘hurd doesn’t look out for me, he only cares about himself, he makes all the money’. i make my plays and i don’t cry about my mistakes. if you missed capitalism 101 kiddies, welcome to class! this is capitalism 101 and if you have game, you’ll go get some like hurd is!

    you are only worth what you are willing to go get. you will only get oiled if you squeek and have game. you are only as good as your last project. my old old old grandfather taught mez young one dat.

    if your in over your head, didn’t plan ahead, and unhappy about your pay cut… oops that’s your mistake… i hopes you learned a lesson in capitalism 101.

    john do, i am young… and oh so sweet! if i have to crush you to get up, don’t blink, because that’s my boot on your head.

    that’s crazy that people we’re posting death threats directed at hurd on this forum the other day. i think one of my new goals is life is to have wimpy john doz anonomuzzzly posting death threats towards me on websites… hahaha. really, i think if my company were paying a million bones in security services for me, i’ll know i have succeeded in smashing john doz into extinction!

    oh wait a minute, my goal is to be successful and john if i can do that and not smash you, i’d actually feel a little bit better because then i can use you again later…

    damn capitalism, it’s painful for the dumb ones until they get the hang of things.

  • john doe

    death threats? didn’t catch that one, sounds equally silly as your ramblings – what’s all your talk of smashing anyway – sounds like a kid with ADD; as an aside, work on your punctuation dear boy – quite atrocious.
    The point is simple – capitalism is a superb system but should be capped at some level of extreme greed for the top levels. Failing this, bonus should be earned based on long term performance, not short term feeding frenzies. Bill and Dave were capitalists, and tough to boot, but built a great company with vision, mission and charter while retaining dignity for the professionals who generated the worth. Sounds like you’re a “mini-pig” aspiring to be a big one. It won’t happen – you may think you have Mr. Hurd’s greed and contempt, but you certainly don’t have his intelligence and education. Sorry!

  • kamasutra

    I don’t agree with you all. I’m working for HP and I think it’s better to cut salaries than to lay people off. 5% is not much! I can live without it and I’m sure you can too. And if not – you have always a choise – find another job. Many of my friend working for different companies have lost their jobs already…they would be happy about a pay cut…

  • Number One GI

    i’m not surprised you missed it john doo, you miss many things… like um this capitalist system that gave hurdy 40m is laced with democracy. so there is a cap or balance if you will. if you own stock you can vote. you have feet and more pay than you deserve, you can get off your duff and go buy some stock. you can get off your duff and go find a job elsewhere too. i’m not aspiring for much of anything other than sending whining scmucks like you home or to russia to farm potatoes.

  • john doe

    GI your answer is unintelligible and I have an IQ of 140+ so I’m sure it’s not just me; also your grammer and punctuation is atrocious so I can’t imagine you should aspire to much more than asinine references to communism and Russia. I’m bored with this – good luck.

  • john doe

    Kamasutra

    Sorry but I must reply – you are completely and utterly missing the point here. I say again – you are completely and utterly missing the point here. The argument is nothing to do with whether you should be grateful to keep your job; in a reasonably fair system I would huncker down and take 10 or 20% cut without a second thought for the good of the company – that is NOT the issue. Please, please and please again strive to understand – the problem here is greed and bloated indulgence on the part of our senior trustees – our “leaders” are not taking an honest salary and the esteem of a job well done to steer us through this while we all take a hit together. What is being done is beyond cynicism – there has been a feeding frenzy by the bloatees in the past couple of years and now the price to be paid is of course by the people who deliver the goods. Shiny disingenuous trinketry is being waved in your face with the inference that loyalty and sacrifice is being called for and needed – we’re all together in this, right?. Yeah sure. While (some of) you gaze doe-eyed at this shameful display like oxen in the pen, the obese farmer is stuffing his gut at a nicely laden table, sniggering to himself and occasionally sending the hired hands out to cull a few beasts. I can’t believe that so many of you hardly rise above the level of domestic animals. I guess we’ll look back in years to come at what went wrong in our good ‘ol US of A and wonder at how it was let slip so far. Take a deep breath, open your mind to the pure thought of fairness and equity across all levels in the company, remember what Bill and Dave built, and see if you maintain your position to for instance your child if they asked you to defend this unfolding scenario. Have some self respect – most of you have worked hard enough to have earned it by now. That’s all – I have to get back to work!

  • Yet Another

    Fred Smith (and another) – the conversation you described with a level 2 UK Manager was ILLEGAL as is the process you described regarding yes/no. I suggest you ask that manager to repeat what he said (with a dictaphone in your top pocket). It would be a relatively easy matter to correlate future redundancies with voting patterns anyway. However, all this is irrelevant, its still the three choices – quit, vote for 5% and get laid off anyway, don’t vote for 5% and get laid off anyway. I suggest you all join Unite before it’s too latee and force Gill to take notice of us. Just remember – every cost-cutting exercise increases senior management bonus.

  • Capitalist with Ethics

    Illegal for sure and sounds like the actions of servile managers with no backbone or sense of decency – epitomising all that is wrong with the professional manager these days. What happened genuine leadership and getting the best from the workforce whilst maintaining some respect for fellow man? Seems like it died in the 80’s and was cremated by that parading horrowshow going by the name of George Bush. I’m inclined to agree that Unite is the only way – senior managers will despise you for trying to get between them and the excesses of gross indulgence that have been their primary focus in latter years, but a little courage is better than feeding the gluttons. If nothing else, stand up for a possibly better world for your children. Also remember – nearly every front line manager and the best of the technical staff know that this is a sick exercise. Sadly they have the brains to understand the full picture but lack the greed and power-hunger to concur with it, so are trapped in pawning this revolting deal to the engine of the company – it’s people. Mr. Hurd – I hope you or one of your fawning acolytes is reading this and “feeding” it back to you – but regardless I’m sure you won’t stop gorging ’til you burst. You really should try to savour the finer things in life – didn’t your mother teach you that gluttony was a sin? It’s of poor consolation to the HP staff but here it is anyway – you will leave nothing of real value behind you.

  • Indigo

    I work for a small Israeli printing press manufacturer that got purchased by HP some 7 or 8 years ago. One small raise since then (or was it two?) – The Indigo division has grown 3.7 times since I have joined, judging by headcount. The overall health of our little company is amazing but I am sorry to be associated with such a company that bought us. They left us alone, and still do more or less – save sales and training, but I wish we would have known that we would be supporting the rest of the sorry organization.

  • Ex HP UK Employee

    It gives me no pleasure to say to HP employees I told you so but … okay it does. Few listened to me in 1990 – 2000, will they now?

    I was an HP UK employee for over twenty years with Bill, Dave and John Young as the CEO’s – what a great company and what great times. Great decision makers, great leaders and loyal staff.

    Then Lew Platt, as CEO, made his two big mistakes. Firstly he split the test and measurement and other non computer businesses off into a company called Agilent. What was that about? I’ve never heard a good explanation for what he did. Secondly, he appointed Carly Fiorina as the HP CEO. What a disaster that was!

    Carly Fiorina poceeded to take over Compaq, which had declined rapidly following their merger with DEC. What did Compaq have to offer HP? As far as I can see there was no major product line that Compaq had where HP wasn’t as good or better. Carly then proceeded to rip the heart out of HP as great employees were made redundant. Carly also destroyed the HP legacy by trying to build a new history and “rebrand” HP. Seeing disaster looming the HP board paid Carly to leave, late but not to late?

    Then Mark Hurd took over, living up to the slash and burn reputation he brought with him. Some say that he was the necessary evil required to clean up the mess that Carly created, others that it was still not to late to rebuild HP as it had been.

    It would seem from an outsiders pont of view that the EDS purchase has added a capability that HP had tried, unsuccessfully, to build for itself for over ten years. Inevitably redundancies followed but that’s what HP is about now, buy what they want, make “excess” employees redundant, and ship jobs to the place where they can be done more cheaply.

    One thing is for sure, if you work for HP your job is not secure, regardless if you take the pay cut or not. My advice to HP’s UK employees – if you are under 45, or have skills that are in demand elsewhere, tell HP you are not going to accept a pay cut and start looking for a job elsewhere. If you are over 45, or have skills that are in demand, take the pay cut and look for a job in a company that will appreciate you.

  • I am speechless

    call me stupid, but I really share your pains because I am too a HP employee and am going through the same painful process to “voluntarily” cut my pay. I feel numb to waves of waves of bad news and now this.

    I am going to say “No” and get prepared to deal with the consequences.

  • Capitalist with Ethics

    HP Pay Cuts – an unfair act of economic opportunism and greed.
    02.26.2009 | Posted in Commentary | Author: Damian Saunders | 103 Comments »

    From a superb blog – you should visit:

    http://www.damiansaunders.net/2009/02/26/commentary/hp-pay-cuts-an-unfair-act-of-economic-opportunism-and-greed/comment-page-2/#comment-91

    HP’s CEO, Mark Hurd announced, on the 20th February that he would be implementing a company wide cut in pay for all employees. Starting with a reduction in his own salary by 20%, followed by senior executives who would take a drop between ten and fifteen percent, regular employees 5 percent and exempt employees 2.5 percent. All this in reaction to a 13.5 percent fall in the company’s first quarter profit.

    Now, before I’m accused of making disparaging comments about HP let me just state that I have no issue with HP products and services which are top notch, largely due to the quality of HP people (their most valuable asset). This post is my opinion only, and one I’m entitled to.

    Let’s look at this in a little more detail. On face value it would seem that Mark’s decision was an expedient one and he’s backed it up with the kind of corporate eloquence (read smoke and mirrors) that we’ve become used to from him, it’s anything but that, to me it smacks of opportunism, pandering to investors and market analysts, and cold hard manipulation at a time when we need CEO’s to have the courage to do the exact opposite, and, when we are demanding as much social accountability for their action as they have to investors and Wall Street (now a dirty word) for profit.

    Since when has making 1.9 Billion dollars nett 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.

    First 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.
    So, the question is; what’s the significance of his stated 20% cut in base salary? I would suggest next to nothing.

    You would have to assume that this situation is not much different for the senior executives who are taking smaller cuts

    Ann M. Livermore, Executive Vice President, Technology Solutions Group. Total compensation of $15,675,274 in 2007, $20,551,493 in 2008, a 31% increase in total compensation. For her a 15% cut in base pay ($820,000) would be $123,000 or 0.59 % of her total package.
    R. Todd Bradley, Executive Vice President, Personal Systems Group. Total Compensation of $7,674,083 in 2007, $21,058,092 in 2008, a 174% increase in total compensation. For him a 15% cut in base pay ($820,000) would be $123,000 or 0.58% of his total package.
    Vyomesh I. Joshi, Executive Vice President, Imaging and Printing Group. Total compensation of $12,032,204 in 2007, $21,804,726 in 2008, an 81% increase in total compensation. For him a 15% cut in base pay ($820,000) would be $123,000 or 0.56% of his total package
    Randall D. Mott, Executive Vice President and Chief Information Officer. Total compensation of $7,390,948 in 2007, $28,293,134 in 2008, a 282% increase in total compensation. For him a 15% cut in base pay ($690,000) would be $103,500 or 0.36% of his total package.
    Catherine A. Lesjak, Executive Vice President and Chief Financial Officer. total compensation of $3,741,201 in 2007, $5,552,356 in 2008, a 48% increase in total compensation. Fo her a 15% cut in base pay ($625,000) would be $93,750 or 1.68% of her total package.
    Put bluntly, 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.

    To be fair, and before we contrast this with the HP employee, we have to acknowledge that HP has, under Mark Hurd’s leadership and at least fiscally, performed very well. In his three years on the job sales have increased by $30 billion and profits have tripled. 2008 was a stellar year for the company. HP is now the world’s biggest computer manufacturer. But, at what cost?

    Let’s look at the plight of the HP employee. The first thing we have to consider is that, unlike Mark Hurd, a 5% cut in salary is in fact a 5% cut in total compensation. Someone on a salary of $65,000 would be losing $3250 per year before tax, or $270.00 per month. Some would say this is a small price to pay for keeping your job but I think holding that gun to an employee’s head is outright exploitation and can not be condoned, especially when they have already been exploited enough for the sake of high profit margins and Mark Hurd’s stellar career performance. Ask a majority of HP employees about their current remuneration and you will be lifting a rock that you don’t want to look under, specifically;

    Employees have seen the real value of their salaries diminishing with the rising cost of living since Mark Hurd came on board and even under his predecessor. There are no automatic adjustments for cost of living in HP’s yearly remuneration review (even though the smoke and mirrors will be employed amazingly to suggest HP is paying market competitive salaries).
    With few exceptions most HP employees have not had a pay rise, or anything other than a measly token gesture, in the past three years despite their workload, and the company profit, increasing significantly.
    HP Employees who are promoted into new roles with higher accountability, more work and more stress do not receive an immediate remuneration increase in line with the new position. Instead they have to wait for the yearly review which more often than not sees them bitterly disappointed. If you are employed into a new role in February you will wait until the end of the year for your remuneration review, the company will exploit you for nine months at least prior to that and then your remuneration will be determined by a simple algorithm on a spreadsheet that coldly spits out a figure you will definitely be unhappy with.
    The much touted company performance bonus has the bar set just high enough that it’s only had two significant payouts in more than 5 years. It never makes up for the HP employee’s loss in real wages.
    Am I the only one who thinks it’s time for this to stop? Aren’t the employees the public face of the company, the ones who deliver the services, the ingenious inventors and developers?

    In his address to the company Mark Hurd said;

    In an environment like this, there’s no margin for error and no tolerance for inaction. To give you a little insight into my world, after we report our earnings, we engage in a dialogue with analysts and investors. They’re going to ask what we’re doing in light of the current environment to right-size these businesses.

    Well Mark Hurd, we’ve already had an insight into your $42 million dollar per anum, private use of the corporate jet, overpaid to a vulgar extreme world and frankly, something smells funny. In case you hadn’t noticed it the whole world is in recession. Governments all over the globe, and especially yours, are going into massive deficit to try and kick start their economies and preserve jobs. They are providing handouts of cash to stimulate spending and help us climb the ladder out of recession, the problem is people like you, and your MBA textbook approach to an “environment like this” (one I bet you’ve never seen), your totally myopic view that it’s all about analysts and investors, are simultaneously lowering the ladder down from the top. I’d suggest that there’s no longer any tolerance for the type of action you are taking.

    The way I see it you have two possible answers to the question about right-sizing the business.

    The courageous option, the one that takes guts. You stand up and tell the investors “you know what, we’ve had an amazing period of growth, we’ve reaped billions of dollars profit out of the economy over the past few years, we’ve delivered a strong performance to our shareholders, and we’ve become the biggest computer company on the planet, but now it’s time to show some respect, to our employees, the lifeblood of the company, and the society’s around the world, who have allowed us the privilege to operate and become the company we are. To ensure that no HP employee finds his, or her, way on to the unemployment lines, has their home foreclosed, or has their capacity to contribute to the economy diminished in any way, as a result of company action, until such time as the economic cycle turns for the better. We know we can afford it (hell, we just made 1.9 billion profit in 12 weeks), it will just mean lowering our profit expectations for a short time.”
    The cowardly option, the one that puts you squarely at the bottom with the worst of the worst, your snout in the trough, and your pants down around your ankles. You cut headcount and reduce salaries.
    Mr Hurd also said in his address;

    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.

    We’ll of course not, since you’ve come on board you’ve taken over 40,000 people out of the HP workforce already (and I’m sure that doesn’t account for the thousands of jobs you moved offshore, or the thousands of long term contractors you’ve shafted), you’re still right in the middle of taking 24,600 of those positions out from the EDS merger you started in September 2008. The HP workforce reduction machine rolls on, you probably don’t even have another 20,000 you can drop right now. More smoke and mirrors.

    I’m willing to bet though that, 12 weeks from now, when the recession that will get worse before it gets better is biting harder into your massive profits (and your bonus), you’ll be marching those people out the door.

    I wouldn’t be worried about questions about headcount from analysts and investors if I was you, I’d be more concerned about the astute investor who asks you “what are you going to do when your employees stand up and say enough is enough?” People power has toppled Governments, a disgruntled employee base has the potential to bring HP to it’s knees in days, surely that time bomb’s ticking.

  • Europe1

    Europe not lying down with the dogs…….:

    http://www.union-network.org/UNIIBITSN.nsf/$webDocuments/DE2CE0969D1B9709C125755C004AAEDB?Opendocument

    Americans should cultivate a little self respect like their european colleagues – remember, remember, remember that the top 6 piggies in HP snuffled up $142 MILLION in truffles last year…..now they want to sweeten their obscene treats with the sweat and tears of the loyal workforce. The latter of course are the people (yes “people” Mr Hurd – I know it’s hard to believe) who foraged around the forest and delivered the hoard of truffles to their gaping mouths). I can’t believe that a large proportion of the American HP staff are naive or cowed enough to believe that these salary cuts are necessary measures. Au contraire they are the drug that is needed to satisfy those bloated suits who are drunk with greed. A small candle of hope may have been lit with the election of Obama – maybe the ridiculous excesses will be curbed just a little and I wish the man the very best of luck in dealing with the latter day Robber Barons….

  • Mr Blonde

    -Elimination of Profit sharing for commissioned employees 3 years ago, complete elimination last year. It was the tie that bound us as employees. That used to be $3-$10K/year in the Bill and Dave era per person.

    -HP Corporate United Way contribution cut 50%, soon to be 75%. Bill Hewlett helped found the organization in the US. Hurd has money for him and his friends but not for charity.

    -Serious reduction in Pension contribution. Top end went from 9% to 6% and soon to be further reduced…so unless you make $40M, you won’t ever be able to retire

    -Elimination of plants in offices to avoid plant maintenance contracts

    -Layering of admin tasks on sales and technical staff to allow them to cut admin positions. So now a $100K’/year sales guy is spending 20 mins trying to ship a package. That makes sense…

    Hurd’s upper East-Side blue-blood aristocratic (fascist) roots are showing. Employees are mearly a cost to be minimized, nothing more, nothing less.

    I met Bill and Dave. I had chit-chat’s with Lew Platt and other C-level execs inthe 80’s and early 90’s. I would have walked through the gates of hell for those guys. I believed in them, in what they were trying to achieve and believed in the value of my role. Now, it’s just another faceless ugly American corporation. Sad…..it’s a Karmic universe though, there is solace in that thought.

  • GreedyParasites

    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 – and you’re being fleeced to feed the beast.

  • How_do_they_sleep_at_night

    How do they all sleep at night? These executives at HP do nothing but butter their own bread like Rittenmier did to EDS !! “It is all for the good of the company” What a crock of SH#T!!! They stuff their pockets at hurt the dedicated men and women that built these two companies. I hope they sleep at night…….and if judgment day comes in our lifetime, we all know who will be getting more than anyone. I cannot get over that they could do this to people that are struggling with higher cost of living, that have no increases in years while they say “the board decides our compensation” So you cannot do anything about getting $42M in total compensation last year? Hey, I have an idea…BE A MAN AND GIVE IT BACK TO THE COMPANY !! I am sure you can survive with a few less million….we can’t hardly make our bills. Oh well, when the next set of leaches come in to strip the company, we will think this was a bunch or choir boys………..Oh, by the way – EDS saved your ASSES in your financials…just because HP is going down, you don’t punish those poor folks by firing them, cutting their pay and telling them to work harder!!
    The executives are the ones that failed – fire them, and the ones that are left – cut their TOTAL compensation down to a 5 year employee salary…..see how the other half lives.
    Hmmm additional 10% cut to US EDS only in April, the end of the fiscal 2nd quarter…..FIXING YOUR NUMBERS??!?!?!?!?!?
    I could just PUKE!!

  • Jacked

    Well if you are with EDS in USA only as of yesterday, we got hit with a 20% pay cut for the month of April! I am going to be living off PBJ just to get the kids to daycare so I can go work for the ___ ____ ____. WELL maybe next month it can be 30% and then oh maybe lets just give us miniumum wage or what ever they feel like each month. I am about to move out of the USA since at least other countires have unions to fight for them on stupid BS like this. Why doesn’t he just take and

  • when will it end…

    Does anyone believe the greedy fat cats won’t make the temporary 10% cut in April 09 a permanent one?

  • Turk182

    This is pure crap. The late Friday night email telling the dedicated EDS team to again bail out HP. I wish a real executive would step up and be honest with thier employees. No company is anyting without a dedicated team.

 
 
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