No. 1 Corporate Citizen !

It's not a joke : Corporate Responsibility Magazine gives HP high marks in environment, human rights, employee relations, philanthropy, and more...

HP took the top spot in Corporate Responsibility Magazine’s 100 Best Corporate Citizens list for 2010, rising from fifth place last year. The list is considered the preeminent of its kind.
“Global citizenship is in our DNA at HP. We hold ourselves to very high standards, so we are very pleased and honored to be recognized for our efforts, particularly by this respected source,” said Gabi Zedlmayer, vice president, Global Social Innovation.

Global citizenship is one of HP’s seven corporate objectives, rooted in the company’s founding values and key to success. While this recognition highlights HP’s most recent accomplishments, global citizenship has influenced how it has run its business for more than 70 years.
“Our work in this realm encompasses HP’s commitment to align our business goals with our impacts on society and the planet,” Zedlmayer continued. “We recognize that our actions can make very real differences in the quality of people’s lives around the world, and we will continue to work toward creating a legacy of real and lasting change.”

How the ranking is determined :

The 100 Best Corporate Citizens List is based on more than 360 data points of publicly available information in seven categories, weighted as follows:
Environment — 19.5%
Climate Change — 16.5%
Human Rights — 16%
Employee Relations — 19.5%
Governance — 7%
Philanthropy — 9%
Financial — 12.5%

HP faces strikes in England. Again !

March 22 (Bloomberg and San Francisco Business Times)

The Public and Commercial Services Union said up to 1,000 members working for Hewlett Packard Enterprise Services will take a further four days of strike action in a dispute over pay and job security.

Workers at Hewlett-Packard Co. plants in the north of England plan for four days of strikes, starting next week. The Public and Commercial Services Union, based in London and representing some 300,000 members in the United Kingdom, said as many as 1,000 of its members will strike for four days at HP plants. Workers at some of the sites have already walked off the job for two days earlier this month.

Work stoppages are planned for March 29 and 30 and for April 6 and 7. They'll affect plants formerly run by Electronic Data Systems, which is now owned by HP. The plants are in Newcastle, Washington, Preston, Lytham St. Annes and Norcross.

"There has been growing anger amongst staff since HP took over EDS ... with 3,400 staff already axed across the UK. Staff have been further angered by the imposition of a pay freeze last year and for 2010 despite the company delivering record revenues worth billions of dollars," the union said. Mark Sewotka, the general secretary of the union, said employees at the HP plants felt "betrayed. "Hewlett-Packard bought Plano, Texas-based EDS in 2008 for $13.9 billion and laid off some 25,000 of its workers. Last September, HP renamed the unit HP Enterprise Services. Perennial presidential gadfly H. Ross Perot started EDS in 1962.

Major strike in UK

Computerworld

More than 1,000 HP staff in the Public and Commercial Services Union are set to strike tomorrow after talks to resolve a dispute over pay and job cuts broke down. HP Enterprise Services workers taking part in the strike include those based in Newcastle, Washington, Preston and the Fylde Coast. The action will target four sites working mainly on IT contracts for the Department for Work and Pensions (DWP), the Ministry of Defence (MoD) and General Motors.

The workers' complaint centres on a pay freeze imposed for this and next year, as well as on the 3,400 EDS staff who have been made redundant since HP took over the company in 2008, and the 1,000 job losses planned for the first half of this year. Mark Serwotka, PCS general secretary, said: "Strike action is not a step that our members take lightly. They have worked hard to help the company deliver fourth quarter revenues of $30.8 billion yet have been slapped in the face with job losses and a pay freeze for two years running." Jim Hanson, national officer at PCS, said that the main disagreement with HP's offer is over pay, with HP offering to only remove the pay freeze for two years, rather than permanently. Also, Hanson said that HP is refusing to recognise staff they hired directly as being part of the PCS talks, despite them also being members.

According to HP, 288 union members rejected the company's latest offer and voted to continue with the planned strike. "We are disappointed to confirm that a small number of employees have voted in favour of local industrial action on Friday. A reasonable offer was put on the table by HP, in response to the union's requests, however this was rejected without a counter offer being proposed by the union," HP said. "We will continue to maintain a dialogue with the union in an attempt to avoid any further form of action." The company also said that it has put a plan in place to deal with the impact of the strike action, including reducing non-urgent project work and moving resources to prioritise critical work.

In December, HP narrowly avoided a strike by PCS members by agreeing to sit down to talks at the eleventh hour. HP was then due to meet with the union on December 16 to try and reach a settlement for workers. Last week, HP averted nine strike days that were due to be undertaken by customer service engineers in its CDS business, by agreeing to a confidential deal on pay and pensions with trade unions. Computerworld UK understands that this agreement addressed some of the employee concerns around the potential scrapping of a £2,000 performance bonus scheme and a final salary pensions. However, neither HP nor the Unite trade union gave details of these discussions.

HP faces strike action in UK over pay and pensions

V3.co.uk,

The UK's largest trade union Unite is balloting members working at HP on strike action after the company changed the status of some of its engineers and support specialists. The union announced the action over the company's planned changes in staffing rules, which would see 150 employees of HP IT services shifted to jobs at HP CDS, which would see them losing final salary pension schemes and performance benefits worth around £2,000.

"Our members face cuts to their pay and pensions and have no choice other than to begin an industrial action ballot. This is the latest in a series of attacks by the company on our members' pay and conditions, while senior executives and shareholders do very well indeed,' said Peter Skyte, a Unite national officer. "Unite remains willing to seek a resolution to this dispute with HP but not on the basis that one employee's pay cut results in a HP executive's pay and bonus increase.'

In its last financial report HP reported profits of £973 million for the quarter, and said that European demand was lower than any other major market. The company has already confirmed it is cutting some of its UK staff but hasn't confirmed numbers, although Unite expects 850 jobs to go. It has also cut back on staff at EDS and has repeatedly cut salaries for those staff still employedUnite has become increasingly active in the IT sphere, taking on IBM and Fujitsu over pensions and job losses.

If the ballot is successful it will be the first time HP has faced a British strike.

EDS staff voting on strike action in UK

Computerworld : staff at EDS, who are now employed by HP, are voting in a strike ballot as they express their “anger” over upcoming job losses.

Most of the 1,000 staff, who are members of the PCS union, work on a series of IT contracts at the Department for Work and Pensions that are worth £3 billion and run until 2015. They work in locations around the UK, including Newcastle, Washington, Preston and the Fylde Coast, on areas including desktop and datacentre management, and application maintenance and support.

There had been “growing anger” among the staff since HP bought EDS in 2008, the union said. Their complaint centres on the 1,000 job losses planned for the first half of next year, as well as a pay freeze, a growing workload, and voluntary salary cuts. Some 3,400 staff have already been made redundant since the takeover.

The PCS ballot offers staff the chance to vote on a series of strikes of one or two days, as well as action that falls short of a strike. Staff have until 30 November to vote. Mark Serwotka, PCS general secretary, said: "There has been growing anger amongst staff who are facing yet more uncertainty about their future.” While employees had been “contributing significantly to HP’s revenue” and taking on more work, “their reward is more job cuts, imposed pay freezes and pleas from the company to take a voluntary pay cut”, he said.

Serwotka urged HP workers to tell their managers that “enough is enough". In a statement, HP said it “respects the rights of its employees” to be part of a union and would continue dialogue with the aim of avoiding a strike.

HP is facing a stike ballot on another front, regarding 150 of its service engineers, who mainly work from home and in the field. Those workers are complaining of a reduction of pay and benefits, and the result of their vote is expected in the next few days.

Elsewhere, rival Fujitsu narrowly avoided a three day stike last week, after the Unite union said there had been some progress in discussions on pay and job cuts. But the situation is not resolved and the union did not rule out further strike action.

Is there a Board ?

TheStreet.com

Mark Hurd was brought in to take the helm at Hewlett-Packard in 2005. He's well regarded by Wall Street for turning the company from a bureaucratic has-been to a market leader again. In the first 2 1/2 years of Hurd's tenure as leader, HP's stock increased 137%. For the last two years, however, HP's stock performance has been mediocre, dropping 5%. Although that was better than the Nasdaq, it tracked that index very closely over that period

While Hurd deserves credit for turning this company around in the early part of his tenure by slashing costs and increasing focus, there are some very troubling aspects about how he, his management team and his board approach executive compensation and governance that suggest investors should steer clear of this Silicon Valley icon until it gets its act together.

Although HP's performance has hit the wall in the past two years, Hurd's pay -- and the pay of his management team members -- has dramatically increased. For 2008, Hurd's total compensation reached $43 million, which made him the fourth highest paid CEO in America for 2008. Hurd's total compensation increased 73% from his $25 million in 2007, even though HP's stock price declined 29% in 2008.

On his senior management team, the sharp compensation increases in 2008 were also noteworthy. CIO Randy Mott's total compensation went up 400% last year to $28 million. Imaging EVP VJ Joshi's total compensation jumped 83% to $22 million. Personal Systems EVP Todd Bradley's total compensation jumped 263% to $21 million. Technology Solutions' EVP Ann Livermore enjoyed a 31% bump in total compensation to $21 million. And CFO Catherine Lesjak got a 49% increase in total compensation to a more modest $6 million.

What also raises eyebrows about these sharp executive raises, aside from it happening in the face of a sharp stock price drop for the year (and the general market uncertainty which remained at the end of the year), is that 2008 was also a year in which these same leaders imposed mandatory 10% pay cuts for other executives and 5% cuts for the rest of HP's workforce. It hardly seems like this select group is shouldering the pain like the rest of the employees.

At Dell, the magnitude and the general direction of total compensation were far different than HP for 2008. Michael Dell's total comp dropped 9% in 2008 from the previous year to $2 million. Other senior executives on Dell's management team decreased or modestly increased to an average total compensation for the year of $9.5 million -- or less than half of what their HP counterparts took home for the year.

But what should be most rankling to HP shareholders -- and a very good reason to avoid the stock in the near term, as it speaks to the values by which this board and management team operate -- are the perks these executives are asking for and receiving from the board.For example, last year HP shareholders paid $7,472 for travel expenses related to Mark Hurd's family accompanying him to business meetings. Expenses for Hurd's security service roughly doubled to $256,000. Shareholders paid $500,000 combined in 2007 and 2008 for legal fees associated with bringing over CIO Randy Mott from arch-rival Dell. All senior executives availed themselves of about $18,000 worth of financial advice in 2008 (about four times the amount Dell senior executives received that same year).

Perhaps the biggest bonus for being an HP senior executive is getting access to the fleet of corporate jets for personal use. Shareholders forked over $136,000 for Mark Hurd's personal use of the aircraft in 2008. Todd Bradley's personal use of the aircraft cost $128,000 in 2008, which was actually down from $327,000 worth of personal travel in 2007.
HP explains in its proxy filing that for "purposes of reporting the value of such personal usage in this table, HP uses data provided by an outside firm to calculate the hourly cost of operating each type of aircraft. These costs include the cost of fuel, maintenance, landing and parking fees, crew and catering and supplies."

I think it's completely unacceptable for shareholders to pay for this personal use perk. However, this explanation left me with more questions about these numbers. Who is this outside firm that provided this estimated hourly cost? What in fact was the hourly cost? How do shareholders know that the hourly cost was a fair market rate? Finally, what were these personal trips?I'm not even sure how it's possible for Todd Bradley to have racked up $327,000 worth of personal travel in 2007. Did he have time to show up for work that year? Call me a conspiracy theorist but isn't it possible that this outside firm vastly under-stated the actual (fair market) hourly cost of using these aircraft for personal use? How will shareholders actually know unless the company releases the flight logs and numbers ?

Dell and his senior executives charged no personal use of their aircraft to its shareholders.A later footnote in the proxy filing for Hurd's personal travel says that the first 25 hours of personal travel are included and are "grossed up." Hurd owes taxes on the value of that perk, but HP's board has decided that HP shareholders should pay Hurd's taxes instead of Hurd.The same footnote later says that if Hurd's spouse is "requested by HP" to travel with Hurd, then the company "grosses up" that amount, too. The internal process that goes on in determining the company request is not described. It could be as simple as Mark Hurd leaning over and saying to his assistant: "I'd like to go play golf in Hawaii this weekend with the CEO of one of our clients on business. Can you write me a quick email saying that, on behalf of HP, you're requesting that my wife fly with me?"

And don't forget the minor scandal the erupted last January, when blogger Michelle Leder of Footnoted noticed that HP had "grossed up" Hurd $79,814 for taxes he paid on meals involving his family. (Ann Livermore and VJ Joshi also got "grossed up" $10,000 apiece for meals with their families.)

Michelle estimated that, to receive a "gross-up" of this amount, Hurd and his family would have had to run up food bills during the year of more than $243,000. HP protested, saying it had made an error in its calculations and even refiled its proxy with the SEC. Magically, Hurd's "gross-ups" for his family meals shrunk to $3,285. HP's error and refiling could have simply been a decision on its part, based on the angry reaction of employees and shareholders, for Hurd and all executives to simply cover these meals and their taxes themselves. Let's face it: It wouldn't have been a hardship for any of them based on their compensation last year.I don't mind pay for performance. I do mind pay for non-performance and I mind perks for breakfast, lunch, and dinner. And in a year of across the board pay cuts? Where is their shame?The board is equally or more to blame of course. After all, they approved all this. I was particularly surprised to note that Ken Thompson has served on the HP board for three years now.

Thompson is one of the most disgraced CEOs coming out of the financial crisis.He ended up destroying the fifth largest bank in America, Wachovia, by pushing it heavily into the area of subprime mortgages. When you destroy a company with $8 billion in annual profits, you shouldn't have the right to continue serving as a director and get $300,000 a year for doing so.
It was announced last week that Web pioneer Marc Andreesen would join HP's board. I hope he can help reform the company's governance, but I don't think it's likely. In 2006, Andreesen sold his company Opsware to HP for $1.6 billion -- making him indirectly beholden to Hurd and the rest of the board for his payday. That means Andreesen will likely be another voice around the table tacitly approving whatever Hurd wants to do and pay himself.

Disclosure: At the time of publication, Jackson did not hold any positions in the companies mentioned.

HP's Salary Cuts Forcing Out EDS Employees in the US

"...Employees were prepared for salary cuts between 2 1/2 percent to 5 percent. Last Feburary, former EDS employees had their salaries sliced by hp by 2 1/2 percent. In April, more cuts with salaries slashed another 10 percent, that 10 percent figure was restored a month later but the email received by the employee this time indicates nothing surgical in the wage cut.

"My pay is being reduced a total of 29 percent, 20 percent effected Sept. 1, the additional 9 percent effective Sept. 1, 2010," the man said. That's nearly a 32 percent salary cut for one employee in two years time -- more than one-third of his base salary. The cuts push him back to the salary he earned working the same job in the same building more than 10 years ago. Other former EDS employees said that under Hewlett Packard, they've experienced salary cuts of between 10 percent and 47 percent.

A spokesperson for Hewlett Packard said not all former EDS employees face wage cuts and that the salary realignment," enables hp to effectively drive its pay for performance strategy with a consistent job-based foundation for rewards, development and organization planning," said an hp spokesperson...."

http://www.nbcphiladelphia.com/news/tech/HPs-Huge-Salary-Cuts-Forcing-Out-Old-EDS-Employees-52485672.html

See also : EDS workers face more pay cuts