HP CEO gets $26M in 2007 pay

HP CEO Mark Hurd received compensation the company valued at $26 million for the 2007 fiscal year. Hurd, 51, took home $1.4 million in base salary, another $1.4 million in bonus money and nearly $12 million in cash incentive payouts.

Hurd also received shares of restricted stock valued at $6.8 million and stock options worth nearly $4 million during fiscal 2007, which encompasses the 12-month period that ended Oct. 31. Also included in Hurd's pay package was $515,000 in additional compensation, including more than $138,000 in restricted stock dividends, nearly $126,000 in expenses for home security services and a mortgage subsidy of about $111,000.

In addition, Hurd made $4.8 million on stock options he exercised, and he had $7.4 million worth of HP stock vested during the latest period. The company has cut costs by consolidating data centers and corporate offices and aggressively slashing its headcount, including the elimination of nearly 15,000 jobs in a massive restructuring launched shortly after Hurd's arrival as CEO and completed in October.

Some 3,000 workers also left the company as part of an early retirement program that HP initiated last year. Investors have been pleased with the changes. Since Hurd took the reins of HP in April 2005, the company's stock price has more than doubled, from around $20 to more than $40 today, a rise that has created more than $50 billion in additional shareholder wealth.

The Associated Press' calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. They may vary from totals that companies report.
HP calculated that Hurd's pay package was worth $25.3 million.

" Is the work of colleagues at HPS poorer ? "

Variable Performance Bonus heavily criticized by German Works Council (first comment)

Businessperson of the Year !

Business Week names Mark Hurd Business Person of the year !

An Open Letter to the Director of HP Corporate Human Resources

An Open Letter to the Director of Corporate Human Resources, Marcela Perez de Alonso, by the Five French Unions :

Marcela,

Our approach may appear unusual, however if the five Unions present within HP France have agreed to address you directly, it is to invoke a disturbing situation which has generated a lot of emotion amongst HP’s French employees, and which unfortunately has not proved to be solvable through usual consultation and negotiation processes.

The radical changes to the Range Setting which sets employee’s paygrade according to Job Function have lead to the following situation in France:

· Mainstream Population: 73.2% of employees suffer a decrease of 1 to 2 paygrades, whilst only 2.7% increase by one paygrade

· Sales Population: 40.7% of employees suffer a decrease of 1 to 2 paygrades whilst only 3.8% increase by one paygrade

This announcement was received as a shock by French employees, and has been difficult to accept for three reasons:

1 - Loss of confidence in the rating mechanism :

Most people accord importance to the Job and Wage architecture as a way to position their value to HP and career progression. Proceeding with such massive paygrade degradations have provoked feelings of personal devaluation, and has directly lead to the mistrust of the job and rating mechanism. It has disappointed HP employees who saw their efforts rewarded in the wage and earnings system. Consequently these massive degradations are undermining employees’ motivation and morale.

2 - France unfairly affected :

Whilst EMEA as a whole is impacted by a drop in paygrades for an average 20% of the workforce, France is affected to the tune of about 60%. What might appear elsewhere as an adjustment to the system, because of the massive scale of degradations in France it is seen by many as a sanction of French employees.

3 - Lack of transparency :

Prior to this new range setting, French HR had always justified the positioning of pay grades in France as being market-compliant. The explanations for the new mechanism of range setting are presented as: "Market research, revision of the “competitive index”, new policies "on the pay grade ranges”. But neither Union Representatives nor their appointed Experts have received communication of the new market research or how they apply to jobs within HP France. This makes the exercise completely opaque, and it is impossible for us to understand or verify. The underlying logic of a very important change to pay market analysis from one fiscal year to another remains totally incomprehensible, and through lack of justification it cannot be serenely embraced by employees.

Faced with this situation, and on several occasions, the French Unions have invoked the frustration and incomprehension expressed by employees, both to HR France (Pierre-Yves Tilly) and to the France Country Manager (Yves de Talhouët). Pressed by employee meetings at all French sites and petitioned by over 1800 signatures, the unions have asked for:

· A moratorium on the application of the new range settings
· The provision of information needed to gain a detailed understanding of the motivations behind the changes in order to be able to discuss in a concerted manner their adaptation to the HP France population.

HR France appears to have understood our arguments and our discontent, and apparently requested to HR Corporate a moratorium on the implementation. However their response is that this has been refused. However, HP France employees have difficulty assimilating these changes, and do not wish to internalise their loss of confidence and hopes, and their frustration. Since no further progress on this issue seems possible in France, we hereby are informing you of the situation in France and ask you formally for a response to our requests:

· A moratorium on the implementation of the measure
· Access to the detailed information which underlay the changes to the range setting system so that we can openly negotiate their application in France.

Finally, we would also ask you to respond to this open letter by explaining directly to french employees the foundation and the benefits of these changes as well as any clarifications that you consider appropriate to address the unhappiness that the measures have provoked.


Best regards,

The Five French Unions.

Employee talks : "Industry benchmark excuses"

"HR, speaking for management, sends out notes each time cuts in benefits, elimination of retirement plans, job re-classifications and even office cube-size reductions are announced. The notes justify the reductions by basically saying, "After careful analysis of what is going on in the market, it was found that HP was being too generous to its employees and is lowering the benefits to be more in line with market conditions."

Interestingly, while externally we are trying to set the industry agenda, internally it oftentimes feels like we are on a race to the bottom of the pack, using industry benchmarks as excuses.

I know it is self-serving to complain about what I have lost and I know that cutting costs in our business is a fact of life for the rest of our lives. Yet, I wonder how much more can be squeezed out of us before the career becomes just a job — and the job is done just according to spec. If my pay and benefits are set by the industry benchmark, should the quantity and quality of the time I spend on the job also be industry-average ? "

HP to Buy Back $8 Billion of Stock

Supreme Court rejects Hewlett-Packard's efforts to block class action suit

AP

The Supreme Court on Tuesday allowed a class action lawsuit to proceed against Hewlett-Packard Co. that alleges Compaq, now a part of HP, sold defective computers.

The Supreme Court's action lets stand a 2005 ruling by an Oklahoma state court. The case involves a lawsuit by two Oklahoma residents, Stephen and Beverly Grider, who allege that Compaq Computer Corp. sold them a defective computer and didn't repair or replace it, as called for in the company's warranty.

The Griders sued in June 2003 and their lawyers asked the state court to certify a class of 1.7 million people who had bought similar computers. Their request was granted in 2005.
Compaq was purchased by Hewlett-Packard in 2002.

Class action suits allow numerous plaintiffs with similar claims to proceed in a single trial. Businesses usually oppose such designations given the greater damage awards that can result.
Compaq argued in court papers filed with the Supreme Court that a virtually identical lawsuit was brought in Texas in 2000. In that case, the Texas Supreme Court refused to certify a class action, ruling that Texas law shouldn't apply to out-of-state members of the class.

Nevertheless, Oklahoma's highest court not only certified the class, but said that Texas law should be applied in the case because, among other things, Compaq was headquartered in Texas.

Compaq's lawyers said that under the full faith and credit clause of the Constitution, which requires states to honor each others' laws and court rulings, Oklahoma shouldn't be able to apply Texas law when Texas' highest court has reached the opposite conclusion.