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 user 2009-04-10 at 12:25:50 pm Views: 53
  • #21868

    HP exec nets from employee loss,Cutting pay to jack up the stock
    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.”

    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.”