[Anonymous]

http://www.boiseweekly.com/gyrobase/Content?oid=oid%3A322696
Bonus-gate
HP exec nets from employee loss,Cutting pay to jack up the stock
Amid
the furor over bonuses paid to executives at AIG, some Boise technology
workers have been outraged about executive bonuses at their companies
despite layoffs and pay cuts for workers.One major case in point is
Hewlett-Packard. HP announced last September that it would be cutting
24,700 jobs, and Boise is among the places hit. In February, CEO Mark
Hurd sent a memo to all employees telling them the company would be
instituting across-the-board salary cuts.”My base pay will be reduced
by 20 percent,” Hurd wrote in a February memo to employees that was
posted on several tech Web sites. He added that other executives’ base
pay would be cut 10 to 15 percent and other employees’ wages would be
cut 2.5 to 5 percent.But those executive pay cuts aren’t as deep as
they seem. According to HP’s latest proxy statement, base salary only
makes up 10 to 20 percent of executives’ compensation. Hurd made $42.5
million in compensation last year, and only $1.5 million of that was
base salary; a 20 percent base pay cut for Hurd is just about $300,000,
a pittance compared to his overall compensation.

But the
across-the-board pay cuts would improve profitability at HP—which may
help Hurd get much more in incentive pay.”Compensation is mostly
comprised of whether [executives] meet goals for revenue, profits and
cash flow,” said HP spokeswoman Mylene Mangalindan. Cutting employees’
wages would improve the bottom line, helping Hurd meet his profit goals
and perhaps ensuring he receives bonuses.

HP employees are angry
that Hurd could profit personally from the money they’re being forced
to give up.”They had no more than announced that the [stimulus] bill
had passed and that we would be seeing a bit of tax relief out of it,
when HP announced that they were cutting salaries across the board,”
e-mailed one Boise HP employee who wished to remain anonymous for fear
of losing his severance package. “Add to that the audacity of Mr. Hurd
himself making a huge show of taking a larger cut than everybody else
[which will actually raise his income in the long run, the numbers are
a bit misleading] and we have 300,000+ very angry employees right now.”

HP’s
Boise operations are being hit by both wage cuts and job cuts. HP is
moving significant numbers of Technology Service Group positions out of
Boise to New Mexico, according to the anonymous employee. The Boise
employees expect to lose their jobs in May or June.”The really funny
thing about our jobs is that they offered to let us keep working for HP
if we would relocate to New Mexico,” the employee wrote. “We weren’t
willing, so they hired new people there, brand new off of the street.
They hired them at more money than we make, so we asked, if we move,
will they raise us to the wage level of the new guys, and of course,
the answer is no. Our team all has 10 years or more with HP. We are all
heading to New Mexico [this] month to train brand new people who make
more money than we do with no experience.”

[Author]

April 10, 2009 at 12:25 PM