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The best CEO money can buy

Even if you're a homesteading customer, your steps back from HP can't keep you from seeing the CEO's windfall. Government securities reports said HP CEO Mark Hurd earned $26 million in compensation for the fiscal year 2007. If that seems like a lot of money, just remember that Yankees pitcher Roger Clemens got 2007 pay of $24 million, pro-rated. Clemens won just one-third of his games, including a flame-out in the playoffs.

Clemens may be headed to the baseball Hall of Fame, but Hurd will take a spot in HP's history as the man who made Carly Fiorina's outsized schemes work for Hewlett-Packard. I say outsized because Hurd did rightsizing on HP as soon as he took over for the fired Fiorina. 15,000 employees lost jobs, some of them who held key HP 3000 information which HP might call upon in a sticky support situation.

That's the darkness Hurd threw over the 3000 customer who's staying with the system and still paying HP support dollars. On the bright side, he brought on the light of a number 1 PC market share and the climb to top revenue rating once IBM left the PC field. Most of the largess on the HP board's part was due to HP beating its 2007 financial goals.

But no matter what the reward for HP, $26 million is a lot of compensation for one officer of any company. In one bit of irony, Hurd earned as much during his third year of HP employment as he directed NCR to pay for an entire company just before he left NCR for Hewlett-Packard. In 2004 he had NCR buy airport kiosk firm Kinetics for a total of $26 million.

Almost half of the $26 million came in stock options and purchases, and even housing perks. He earned
$1.4 million in base salary, another $1.4 million in bonus money and nearly $12 million in cash incentive payouts, according to a report to the SEC. Hurd also received shares of restricted stock valued at $6.8 million and almost $4 million in stock options.

HP also paid him more than a quarter million dollars toward the Hurd homestead, for a home security system (we assume this included some guards, rather than just gadgets) and a mortgage subsidy of more than $100,000, according to the SEC document. Real estate values in the Valley must be tough to maintain for anyone earning only $1.4 million in base pay.

But this level of compensation is commonplace for any $110 billion company's CEO, especially a vendor like yours — if you're migrating to another HP platform — which has tripled its profits since the CEO took over. Fiscal 2007 earned HP $7.26 billion, delivered by exceeding goals in every segment of HP's business, alongside the early retirement of 3,000 employees.

Some of those retirements reverberated through the 3000 community during that fiscal year. But the HP 3000 customer continues to contribute to those profits, earned during a fiscal year when HP was supposed to already be out of the 3000 business.

 

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