There are signs that HP’s beleaguered shareholders are starting to wield their clout at the maker of expensive printer ink.
After being treated very badly by HP, and having to watch as the Board paid out huge wodges of cash to the CEOs it fired, it seems shareholders are giving the outfit a Chinese burn and forcing them to listen.
One of the demands of shareholders is that the outfit stops wasting money to make CEOs go away when they are surplus to requirements.
The Wall Street Journal suggests that their pleas have been heard and if current HP CEO Meg Whitman is given her marching orders she will not get the same over-the-top severance package received by Mark Hurd and Leo Apotheker.
HP’s board has changed its executive severance policy and decided that suits terminated without cause will forfeit restricted shares or options that aren’t vested at the time they leave the company.
While the sacked suits will still be eligible for annual bonuses, they won’t be getting any one-time bonuses. Executives will get a series of payments, rather than a lump sum. If you do a Mark Hurd and shack up with HP’s worst enemy, Oracle, you will be judged the weakest link and get nothing.
Hurd received a package in the $40 million range and HP agreed to pay his insurance for 18 months. Apotheker collected about $10 million for his less-than-a-year’s work, and also got to keep 156,000 restricted shares of stock.
What is telling is that the Board never thought to do any of this in the first place. It had given the thumbs up to at least two contracts that certainly did not give shareholder’s value for money. With HP’s shareprice suffering, it is clear that many investors are voting against the board with their feet.