HP Spent Over $80M To Get Rid of Its CEOs

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HP Spent Over $80M To Get Rid of Its CEOs

Posted by samzenpus on Monday September 26, 2011 @04:26AM from the and-here's-a-parting-gift dept.

hapworth writes "Analysis published today shows that Hewlett-Packard has shelled out over $80 million to get rid of three CEOs since 2005. The first CEO to take her expensive exit, Carly Fiorina, received over $42 million, once stocks, options, and pension are factored in. Mark Hurd, after just four years, received $12.2 million to take his exit; and now, after 11 months, Leo Apotheker will walk out with a reported $25.2 million in severance. With eBay's Meg Whitman in as the new CEO at HP, industry analyst Robert McGarvey writes today that 'the HP gig could help Whitman replenish her personal coffers, depleted by the pumping of $119 million into a futile bid to become California's governor.'"

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I've got a better deal by GodfatherofSoul · 2011-09-26 04:29 · Score: 5, Funny

I'll ruin your company for a measly $5 million; no stock options if you don't mind since I'll probably do a pretty good job of it.

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I swear to God...I swear to God! That is NOT how you treat your human!
1. Re:I've got a better deal by Anonymous Coward · 2011-09-26 04:50 · Score: 3, Funny
  
  Yeah? Well I'll do it even cheaper! I'll ruin the company for $4 million!
  Your move bro.
  They should just put it on eBay, and have a special "cheapest wins" sale.
  Cheapest Price To Kill Our Company.
2. Re:I've got a better deal by bennomatic · 2011-09-26 05:15 · Score: 4, Funny
  
  That's insane! You can't ruin a company for less than $5 million! Everyone knows that you need at least $5 million to ruin a company!
  
  --
  The CB App. What's your 20?
3. Re:I've got a better deal by cayenne8 · 2011-09-26 05:25 · Score: 4, Insightful
  
  What does one study to become a CEO??
  I'd love to get that job...tons of money when you're there...tons when you leave, and then...it seems, there are job opportunities after you leave, even in disgrace.
  I don't see any perceptible skills required to be a CEO...is it all only who you know?
  I mean, I'm member and good standing with the "anything for a dollar" club....so, wondering how I could get into the CEO business, and yes...I'm quite willing to sell shares of my soul for this.
  :)
  
  --
  Light travels faster than sound. This is why some people appear bright until you hear them speak.........
4. Re:I've got a better deal by Surt · 2011-09-26 05:33 · Score: 4, Funny
  
  They did put it on ebay. Somehow Meg came out on top in the auction. Surprising result.
  
  --
  "Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
5. Re:I've got a better deal by Nethemas+the+Great · 2011-09-26 05:49 · Score: 5, Funny
  
  You need an MBA (Master of Bullsh*t Arts). Essentially it's a degree in social engineering through plausible fabrication of reality while keeping a straight face. This should of course not be confused with the career path for politicians which starts with a law degree wherein you learn social engineering through the plausible misrepresentation of facts while keeping a straight face.
  
  --
  Two of my imaginary friends reproduced once ... with negative results.
6. Re:I've got a better deal by cHiphead · 2011-09-26 06:57 · Score: 3, Insightful
  
  I know someone who's MBA finals involved take home tests with direct questions and essays. I looked at his test, then proceeded to explain to him how business works and basically did an entire portion of his test based on the IT related business market... I was floored and exploded about it.. THIS IS WHAT THESE ASSHOLES ARE LEARNING? THIS IS GENERIC BUSINESS STUFF that anyone working and interacting with businesses will learn. ITS LAUGHABLE that they are paying to 'learn' this and shows just how bad their financial acumen is if they are plopping 50-100 grand on it. Smoke and mirrors, all the way down. They get fancy University titles, while folks without college degrees get labelled Con Men.
  This has been a production of the MONDAY HATE TRAIN. Its just one of those days.
  
  --
  
  This is my sig. There are many like it, but this one is mine.
Where are the shareholders? by bill_mcgonigle · 2011-09-26 04:30 · Score: 4, Insightful

The Board keeps choosing bad CEO's. Why do the shareholders keep re-electing them? Where are the institutional investors on this? I guess it's their company to destroy, if they really want to.

--
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OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
1. Re:Where are the shareholders? by LWATCDR · 2011-09-26 04:35 · Score: 3, Insightful
  
  The problem is professional CEOs. They go from company to company and really don't care about anything long term. Isn't there one person that has worked at HP all their life that can step up and be CEO?
  
  --
  See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
2. Re:Where are the shareholders? by doconnor · 2011-09-26 04:41 · Score: 5, Insightful
  
  One problem with shareholder democracy is that if a shareholder doesn't like the management of the company it is far easier for them to sell the stock and forget about it then to work to elect better management.
  A lot of people have been selling their HP stock recently.
3. Re:Where are the shareholders? by Anonymous Coward · 2011-09-26 04:45 · Score: 5, Interesting
  
  What's odd is when I worked at HP, there was a strong promote-from-within culture. It was relatively rare to bring in outside executives. Carly started her tenure as controversial CEO because she was an outsider, not because she was a rhymes-with-witch in heels.
  But one article I read this weekend said the board looked around and none of the current second-level VPs was ready to be CEO. I find that somewhat hard to believe and poor planning on the part of the board. To have a prudent succession plan, they should always have a few potential CEOs being groomed.
  I still want to know how Leo swung $2 million a month for his walking papers. I want a piece of that action. If I get fired for cause, I get zip. My few remaining options are worthless, my RSU vesting screeches to a halt, no severance pay, nothing.
4. Re:Where are the shareholders? by Archangel+Michael · 2011-09-26 05:38 · Score: 3, Interesting
  
  This is because to care about a stock, you have to care about the company. To care about the company, it can't be run by professional Board Members who are appointed by Professional Stock Managers. The simple plan is to immediately divest yourself of any stock the moment that Institutional Investors (ie Wall Street) gain control of the Board.
  Look for smaller companies that don't have professional boards and haven't been discovered by institutional investors. Or don't care, and buy Market based Mutual Funds.
  
  --
  Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Interesting... by Ecuador · 2011-09-26 04:30 · Score: 4, Insightful

The one who was considered successful by all (Hurd) was the one with the least compensation (by a huge margin if you consider his years on the job vs Apotheker). It is no joke we say the worse you do as a CEO the more money they pay you!

--
Violence is the last refuge of the incompetent. Polar Scope Align for iOS
Golden parachutes.... by luis_a_espinal · 2011-09-26 04:33 · Score: 3, Insightful

... should be tied with performance measurements meeting certain baselines - reduce waste (not the same as reducing cost), or increase profits by % - that are established at the time of hiring instead of being given wholesome at the exit door. Then again, I might as well wait for pigs to fly.
1. Re:Golden parachutes.... by Reverand+Dave · 2011-09-26 04:55 · Score: 3, Funny
  
  Exactly, they are this nations "Job Creators" after all. They should be handled with all things soft and heralded with golden trumpets when they enter a room.
  
  --
  I got here through a series of tubes
Why does this happen? by MrCrassic · 2011-09-26 04:37 · Score: 4, Insightful

Why is it that even poorly-performing CEO's get incredibly huge severance packages? I can understand CEOs that actually helped raise a company getting nice parting gifts (like Lou Gerstner and Bill Gates), but shouldn't leaders that, effectively, failed to lead? get much, much less?
1. Re:Why does this happen? by TheSpoom · 2011-09-26 04:57 · Score: 4, Interesting
  
  The problem is the CEO is more or less the head of making decisions. So the first CEO ages back made the decision that CEOs should get a ton of money when they leave, regardless of the reason, the only way such a boneheaded policy can be removed is if the next CEO pushes for it. The problem is... where on earth do you find a CEO that will fight against giving himself money.
  Replace CEO with politician and the same applies (which is also why you see the two interchange so often).
  
  --
  It's better to vote for what you want and not get it than to vote for what you don't want and get it.
  - E. Debs
2. Re:Why does this happen? by Surt · 2011-09-26 05:27 · Score: 3, Interesting
  
  But Leo took a huge risk taking on HP. I mean he failed, and so he will literally never work for more than $10 million per year again. To get him to take that job, they had to negotiate it so that no matter how he left he'd be taken care of for life. Otherwise, who would take that kind of risk?
  
  --
  "Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
Re:So HP is learning painfully expensive lessons by ceoyoyo · 2011-09-26 04:56 · Score: 3, Insightful

"but we are talking about the one in a million type person/personality types. Just like there is little chance any kid you went to school with would ever be a NBA/NFL star or Hollywood A-lister (or even B and C) their chance at this level is equally small."
Hm... maybe that's the problem. HP (and other companies) should stop hiring one in a million, self-important sociopaths with overly inflated egos and try some normal, competent people.
A slap in the face... by AliasMarlowe · 2011-09-26 05:19 · Score: 4, Funny

I still want to know how Leo swung $2 million a month for his walking papers.
Actually, it took a lot of courage and fortitude on his part. He had to talk the board down from their initial settlement offer, which was vastly greater (it's only shareholders' money, not their own). Apparently, he wanted the monetary compensation to be so small that it counted as an obvious reprimand, almost an insult, and he clearly succeeded. A mere $25million is as hard a slap in his face as this board could be expected to give...

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Those who can make you believe absurdities can make you commit atrocities. - Voltaire
Re:stop hiring out side MBA's and promote people by dkleinsc · 2011-09-26 05:20 · Score: 4, Interesting

It may be better in terms of long term performance, but consider this approach to making money if you're on the board of a company:
1. Hire a perceived "rock star" CEO.
2. Stock goes up on the announcement.
3. Sell some of your stock right after the announcement (nothing suspicious about that, just collecting a gain)
4. If "rock star" CEO doesn't work out (as seen in some of the quarterly reports, so you aren't insider trading illegally) buy up some company stock as the price gets lower.
5. Fire bad CEO, stock goes up on the announcement.
6. Form CEO search committee, go to step 1.
This will eventually run the company into the ground, but a director could make a lot of gains on the way down. And they can continue to hold their seat on the board by timing things so that board elections happen between steps 4-6.

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Re:So HP is learning painfully expensive lessons by peragrin · 2011-09-26 05:21 · Score: 3, Insightful

Normal people arent competent.
Competent people are harder to find than 1 in a million.

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i thought once I was found, but it was only a dream.