Worth reading : HP IG Metall Standpunkt !

HP-IG Metall December 2006 Newletter

You will find the english "best of" in the comments :
- Downsizing at HP
- Offshoring
- Global delivery
- Nearshoring
- Everyday office life
- Sales commissions
...

HP Paid for Dell Plans, Ex-Employee Says

Jan. 24 (Bloomberg) -- Hewlett-Packard Co. paid to obtain information from a former head of a Dell Inc. unit about Dell's plans to enter the printer market, a former Hewlett-Packard executive said in court papers.

SEC Delays Decision On Board Nominations

WASHINGTON (Los Angeles Times)

The Securities and Exchange Commission Monday said it would not intervene in a dispute over board election rules at Hewlett-Packard Co. and signaled that a clear policy governing director nomination contests probably would not be implemented until the 2008 season of corporate meetings.

"In the short term, the SEC decision to steer clear of the Hewlett-Packard conflict means the Palo Alto-based technology firm might face a greater risk of being sued if it excludes from its annual meeting in March the election resolution submitted by a group of large public pension funds. The measure would change the company's election rules so that investors who own 3% or more of the stock for at least two years would be able to place nominees on the company's official election materials.

The proposal follows disclosures last year that HP hired private investigators to spy on reporters and its own directors to find the source of a leak to the media. HP had asked the SEC to let it keep the election measure off its 2007 corporate ballot, but on Monday the SEC said its staff would keep quiet on the matter.Having been denied explicit permission to exclude the measure, HP officials run the risk of drawing a legal challenge if they do so." We're prepared to litigate," said Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees, one of the groups pushing the proposal. The SEC decision, he maintained, amounted to a "green light" for shareholder election proposals.

HP had no comment Monday on the SEC decision, said Ryan J. Donovan, a company spokesman. The ball is in HP's court now," Borrus said. "The company will have to think long and hard about its next step. Any move to try to boot out the shareowner access proposal would likely be litigated in court. " Shareholder activists, including many pension funds, have long sought greater influence in the director nomination process, which is largely controlled by management and the board. Big-business lobbies have opposed the effort to loosen up elections, saying that such a step could empower special interests whose agenda is more narrow than that of ordinary shareholders.

The subject of shareholder voting rights is one of the most contentious issues in the area of corporate governance. The SEC has been unable to resolve the matter. In the coming months, he said, the SEC would consider the legal issues surrounding the matter, aiming for "one clear rule to protect investors' interests in all jurisdictions during the next proxy season."

HP CEO denies 'bullet dodging' with stock sale

A pair of Democratic congressman from Michigan are asking Hewlett-Packard CEO Mark Hurd to explain why he cashed in more than a $1 million worth of stock options just before a scandal concerning boardroom leaks became public.

In their letter, which was written on Dec. 12 and released this week, U.S. Reps. John Dingell and Bart Stupak, who sit on a panel of the House Energy and Commerce Committee that is investigating the Palo Alto, Calif. company, wrote to Hurd to explain the $1.37 million transaction. "In that regard, it appears from the enclosed chart on HP executive trading, that you voluntarily cashed in $1.37 million worth of options on August 25, 2006, the very same day that you were questioned by Wilson Sonsini attorneys who were 'investigating the investigation,'" the two congressman wrote in the letter.

The letter indicates that Hurd cashed in his stock options just before a Sept. 6 filing with the U.S. Securities and Exchange first detailed that the company had started a far-ranging probe to find the source of leaks from the company's boardroom to various media organizations. On Dec. 14, an HP spokesperson told eWEEK: "This is not a new matter and we look forward to responding to the committee's inquiry."

In their letter, Dingell and Stupak question the timing of the stock sale. The two congressmen write that there has been a number of "backdating" scandals at large companies, which "have raised questions about whether executives are cashing in ('bullet dodging') while in possession of potentially damaging material facts that shareholders do not know." The letter asks for a response from Hurd and HP by Dec. 21.

Hurd said in his anwer that the sale was prearranged and part of an ongoing investment strategy. He wrote that the sale of 100,000 shares on August 25 represented only 5 percent of his HP holdings and noted that Wall Street had yet to punish the company's stock over the spying scandal.

"HP's stock has risen by more than $5 per share since the date of the trade," Hurd wrote in the letter. "My August trade was not a case of bullet-dodging."

Here is Mark Hurd answering letter !

The Cuts Aren't Over at HP

CEO Mark Hurd says the company's operational and information technology costs are still too high

Mark Hurd is not done cutting at Hewlett-Packard. Not by a long shot.
The HP chief executive officer has already seen the company through a huge restructuring that reduced headcount by more than 15,000 and overhauled its retirement plan. And at a meeting with analysts in New York on Dec. 12, Hurd made it clear that there is still more work to be done.

"We are a company transforming, not a company transformed," Hurd said more than once during his remarks. And it's clear there are many targets he has in mind. Real estate is one—HP has "too much" of it, according to Hurd. Operational and information technology costs are too high, he said. "We still have a lot of heavy lifting to do."

Take IT costs. Analyst Lou Miscioscia of Cowen & Co. in New York estimates that HP spends 4% of sales on IT infrastructure. "That's high compared to other companies who spend about 2% to 3%. If they cut it down to those levels, that could mean $900 million in savings," he says.
But as any first-year MBA student knows, cutting costs doesn't translate into increasing revenue. Hurd says that calls for flooding the zone with a batch of new sales personnel. Hurd wouldn't say exactly how many the company has hired or will recruit, saying only that so far "hundreds" have been brought in, and that their results are being tracked closely. "We track sales by person, not only to see how much they're selling but what else they have in their funnel," Hurd said.

So between cutting costs and boosting sales personnel, is that enough for HP ? Not to American Technology Research analyst Shaw Wu, who says he's keeping his neutral rating on the stock for now. "Everything they said is pretty much in line with expectations," Wu says. "We expected more cost-cutting and more attention to sales. But at some point HP needs to reinvest and build up some new revenue streams. Until then it's going to be mostly a cost-cutting story."

Clearly, there is progress being made. The operating margin range expected for 2008 is way ahead of the 6% range HP turned in for 2005. And that leaves the picture looking anything but dour at HP for the next eight quarters or so. "Hurd is a master of setting attractive expectations and then overdelivering on them," says Cowen's Miscioscia. "Even just hitting those expectations, the picture is pretty attractive."

HP to pay to settle pretexting lawsuit but shareholder suit alleges insider trading

HP agreed yesterday to pay $14.5 million to settle a lawsuit brought by state Attorney General Bill Lockyer accusing the company of unfair business practices in its crusade to unmask the source of boardroom leaks to the news media.

The vast majority of the settlement -- $13.5 million -- will fund state and local investigations into privacy rights and intellectual property violations, according to the lawsuit and settlement filed simultaneously in Santa Clara County Superior Court.

"Fortunately, Hewlett-Packard is not Enron," Lockyer said. "I commend the firm for cooperating instead of stonewalling, for taking instead of shirking responsibility, and for working with my office to expeditiously craft a creative resolution."
The state likely would have recovered far less if the case were taken to court, based on the limited penalties it could claim for each phone number that was illegally accessed during the leak probe, Lockyer said in an interview with The Associated Press.

"It's a good example of the HP that we all grew up with, the old HP of Hewlett and Packard, the ethics and principles of corporate responsibility and good management practices," he said. "We see those re-emerging in the way they dealt with this matter."

The remainder of the settlement amount consists of $650,000 in civil penalties and $350,000 to cover the state's investigation and other costs. HP has also agreed to various governance reforms to be in place for five years, which Lockyer said will help protect privacy rights during any future HP investigations. Some of those reforms include the appointment of an independent director to monitor HP's compliance with privacy guidelines, and additional training for investigative staff.

HP CEO Mark Hurd said in a statement that the company is "committed to ensuring that HP regains its standing as a global leader in corporate ethics and responsibility." The agreement did not include a finding of liability against HP. Prosecutors said the company hired outside detectives who tricked phone companies into disclosing the private phone records of directors, journalists and others so the company could track the source of news leaks.

Revelations of the probe, disclosed in a regulatory filing, led to an exodus from the board, criminal charges, a congressional investigation, and ongoing federal probes by the FBI, the Securities and Exchange Commission, federal prosecutors and other agencies. Dunn, who was ousted over the incident, former ethics chief Kevin Hunsaker and three outside investigators, Ronald DeLia, Matthew DePante and Bryan Wagner, have pleaded not guilty in Santa Clara County Superior Court to charges of identity theft and fraud for their roles.
The company's stock price has been relatively unaffected by the scandal, buoyed by strong earnings growth under CEO Mark Hurd and the belief that the turmoil had little affect on operations.

HP shares have actually gained around 9 percent since the probe was disclosed in a regulatory filing, but fell 28 cents to $39.86 Thursday on the New York Stock Exchange. News of the settlement was reported late Wednesday by CNet Networks Inc.'s News.com.
Details of the agreement were announced after the market closed, and HP shares gained a penny.

Analysts said the penalty was relatively minor and would go a long way toward assuaging fears among skittish investors. "It looks like they got off pretty easy, and that this is actually going to be a good thing for HP," said Roger Kay, who follows the company as president of market research firm Endpoint Technologies Associates. "It looks like they're in control of their destiny and have put at least some of this behind them."

But another lawsuit alleges that Chief Executive Mark Hurd and other directors and senior executives sold about $41.3 million of HP stock in the two-and-a-half weeks preceding HP's disclosure that investigators working on its behalf used false pretenses to obtain directors' and journalists' private phone records.

This lawsuit alleges the board approved stock buybacks totaling $10 billion in the months leading up to the scandal "to keep the company's stock price propped up while insiders were selling." The board knew its leak investigation was likely to be made public when it approved a $6-billion repurchase on Aug. 21, the suit alleges.

"Pattie Dunn is not accused of insider trading," Brosnahan said in a statement. Dunn "has never sold any of her Hewlett-Packard stock". The lawsuit alleges that sales by HP insiders surged in the third quarter, when the leak investigation was disclosed, from previous quarters. Hurd, who replaced Dunn as chairman, sold 125,000 HP shares for about $4.38 million from April 3 through Aug. 25, according to the lawsuit filed on behalf of investors, including a union pension fund.

The investors, represented by law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP, claim the defendants sold shares because they knew "the market's perception of HP would be significantly damaged when (not if) the market became aware of the full extent of distrust and acrimony among board members, the outlandish smear campaign tactics the acrimony had spurned and the illegality of the investigatory tactics being used."

CPB is over. Here is the IPB.

Mark Hurd is now considering more than two CPBs moving forward. Not only Business Unit CPBs and sub-Business Unit CPBs but workgroup CPBs !

So the name COMPANY Perfomance Bonus doesn't make sense anymore. We kindly suggest the use of IPB (Individual Performance Bonus) as a better acronym. Just one more individual reward at HP, we were short of...

HP one company ? Forget about it !
Teamwork at HP ? ...

"Tough Cultural Message" Mark Hurd said : you bet !