Profitless Aruba gives CEO a 33 percent raise seven months after layoffs
Aruba Networks, which last November layed off 46 employees to reduce costs and “streamline operations”, last week granted its chief executive, Dominic Orr, a 33 percent raise in salary from $300,000 to $400,000, according to a filing it made with the SEC today.
Chief Financial Officer Steffan Tomlinson got his current salary, which was $280,000 according to today’s filing, boosted 16 percent to $325,000. (His salary in 2008 was lifted from $235,000 to $250,000, according to the company’s proxy statement filed Nov. 25. It’s not clear when he received the interim salary increase. )
Aruba’s vice president for engineering, Sriram Ramachandran, and Chief Technology Officer Keerti Melkote scored 24 percent increases in base pay from $225,000 to $280,000.
Aruba has yet to post a profitable quarter since becoming a public company in March 2007. Sales growth in its most recent quarter slowed to 8 percent compared to a 23 percent gain in the comparable quarter last year.
7 comments
Gary h
I used to work for Aruba and was of course one of the 46 lay offs they mentioned.
This does not surprise me. I hear Keerti needed the raise to support his coke habit. Also his trips to high end womens clothing stores have not waned, gotta hit the gay clubs in san francisco in style he always says!
Jun 18, 2009
L.Gariepy
Nothing changes! Just another one.
The stock went up 200% in the past 6 months!
No profits? For the investors who built that bubble, for the “governance”, great!
This is the “laissez-faire” of the “pure capitalism” (see Wikipedia), that has become so indecent!
Why were the banks protected by TARP so eager to reimburse the loans? Not for the good of the people, just to get rid of the limitations on the CEOs salaries.
And sooner or later, this will bring the fall of the American Empire.
Jun 18, 2009
L.Gariepy
Gary,
I had not read your post before I wrote mine.
I am really sorry for you. I can understand your bitterness.
I wish you another job in a company where the employees will be considered as the best capital of the busyness, the only one susceptible to bring sustainable growth and prosperity.
Lou
Jun 19, 2009
Sphenodontia
Companies aren’t run for the benefits of the employees. They’re run
for the benefit of the shareholders. The fact that there were layoffs isn’t
some terrible black mark against the company that proves the CEO is
incompetent and worthless. It proves “hey, there’s a global recession,
growth isn’t going to be what we thought it would be, let’s cut back on
employees to preserve shareholder value”. That’s sound business sense.
Yes, you lose out on some firm-specific human capital. Sorry. Happens.
Also: Sales up “only” 8% in /2009/? Of course 2008 was a better year for
sales growth. Hello. A duck with a newspaper could tell you that.
I don’t know if the raise is justified as a way to build shareholder value,
but the reasons cited above with the implicit tone of “behold the inujustice”
are pathetic.
The best case made is that of a “profitless company”. It’s true. ARUN hasn’t
posted a (GAAP) profit. But they’re not terribly far away from such profits, either.
Notably, stock-based expenses are keeping them back – the business itself
is intermittently profitable, even if owning an ever-diluting share of it isn’t yet.
Furthermore, they haven’t been at it all that long (the IPO isn’t even 2 years
gone, is it?) and their future profits may be more valuable because they were
willing to take a loss right now. Presumably this is why people will pay
circa $7.5/share for it anyway: they’re willing to think for the long term
instead of just the next 90 days.
Jun 19, 2009
Aruba worker
i work for Aruba right now… and to see them get raise when in fact other areas of the departments are hurtting to get there job done since they/we are short staff if *uck Up…. just Dominic raise can pay for at lest 2 works for any department… eng. software eng. hardware eng. with the “not profitable quarter ” how can they give raises…
Jun 22, 2009
Aruba worker2
Sphenodontia sounds like you’re some exec that got the raise and are defending it.
Listen no one said the layoffs were personal or anything. They did save the company tons of money. What we’re saying is after laying folks off, for financial reasons, you probably shouldnt be giving yourself a raise. Put that money to good use, leave it in the bank so your numbers look even 0.0001% better.
You want to add value to the shareholders? Don’t waste money on raises.. no one deserves them. I like how you contradict yourself. “They’re run
for the benefit of the shareholders” well for the benefit of the share holders they should probably use that money to add to the work force or give more deserving folks at aruba a raise! thereby increasing the stock price and helping the share holders. Giving the execs who have squandered this company away raises does not help the share holders. So you’re wrong.
Dominic recently sent out an “employee satisfaction survey” .. I know plenty of people will be filling it out very honestly.
Dom and Keerti at the guilty ones here, they have to go to work every day knowing that everyone in the company knows that after all this drama, the layoffs, the financial woes, he gave himself a raise (or at least accepted it). They are disgraceful men and do not deserve respect from their employees. I know plenty of folks that deserved a raise more than they did. It’s an outrage.
If I were them I’d keep an eye on my car and tires in the parking lot… someone’s gonna key their cars or slash their tires.
Jun 22, 2009
corruption
Amazing what executives do. biggest hypocrites, crooks, selfish, greedy, and double standard people you can ever find. this is like tivo, where the executive drained the company of $8 million dollar by selling off their shares and continually heavily compensated themselves with options and raises, despite telling the rest of the company that their raises and bonuses would be forfeited. Despite the rest of the company having to bear the downturn, it’s quite ridiculous for how executives can get away for giving themselves bonuses.
Sphenodontia talks like an executive. If you want to preserve shareholder values and company growth, you don’t give yourself a raise while the company is unprofitable, but furthermore, giving it to just himself while the rest of the employees are given nothing.
Jun 23, 2009