Flashback: 1939 - Bill Hewlett and Dave Packard found a company making electronic instruments in a one car garage in Palo Alto, California with an initial investment of $538. The garage is now a historic site. Bill and Dave work hard and build a historically great company.
Today: Hewlett-Packard is part of an international snarl over their claim that they actually overpaid when they bought another company. HP has announced that the company will lose a bottom line $8.8 billion as a result.
This is just the latest financial blunder in a company that has had a remarkable string of them. Starting with Carly Fiorina in 1999, who presided over the loss of a full half of the company's book value, HP executives have pushed the company to dispose of some of their most valuable assets (scientific instruments, semiconductors, optical networking devices, and electronic test equipment - the core of HP's traditional business) and paid premium multibillion dollar prices for other companies to enter new markets (Compaq, EDS, 3Com, Palm), few of which have paid out. For example, HP announced that they would discard the PC business - largely purchased with Compaq - and then changed their mind again. HP originally had to bribe Deutche Bank to vote shares in favor of the merger at a cost of about $2 million. Charges against Deutche Bank would later be dropped. The CEO of Compaq was paid over $14 million to leave after six months with the merged company.
HP paid the executives responsible for these decisions premium compensation. HP paid Carly Fiorina over $20 million just to leave - about three times her annual compensation which was also a travesty. All in all, Fiorina took over $40 million from HP in return for driving the company into the ground. Just as background, HP decided to hire Fiorina from the outside after rejecting someone who actually worked for the company already (Ann Livermore) and when HP started to skid under Fiorina's management, tens of thousands of HP employees lost their jobs before Fiorina did. (Later, Fiorina served as an advisor to failed Republican presidential candidate John McCain and failed to unseat Democrat Barbara Boxer of California, spending more millions in the effort.)
After Fiorina, Mark Hurd became CEO. He was forced out due to a sex scandal and for stealing money from the company. Hurd fired 15,200 workers not long after becoming CEO. According to Wikipedia, Hurd was paid, "the largest bonus of any CEO in 2008, although Hurd would implement a wage freeze on his employees." HP shareholders lost $9 billion in market capitalization after Hurd was forced out.
Shortly after, Pat Dunn, HP Board Chairperson, was forced out after being charged with four felonies for her role in the HP spying scandal. But she never served time because a judge dropped the charges in the "interest of justice".
After Hurd, HP went all the way to Germany to hire Léo Apotheker as CEO. He walked away with $23 million for 11 months work. HP shareholders lost $30 billion in market capitalization during that time.
This brings us to Meg Whitman, the current CEO. Ms. Whitman is under fire now due to the $8.8 billion writedown and she may not last either. That hasn't stopped HP from giving her a compensation package worth a reported $16.6 million. Already a solid member of the 1%, she spent quite a bit of her money she already had from previous corporate over-compensation in an attempt as the Republican candidate for governor of California.
Believe it or not, this is not an article about HP. HP is far more typical of the American habit of gifting corporate executives with fabulous riches for substandard performance. Lots of corporations do exactly the same thing. The way the executives at IBM drove the company right into a tree made me (literally) cry a few decades ago.
I'm documenting the mismanagement and sickening compensation at HP to head off complaints from RWNJ's that I have not supplied any details to prove my case. Another article here on the Vine is blaming the workers at Hostess for the bankruptcy of the company when, in fact, the management gave themselves huge compensation packages while making the critical decisions that have now resulted in the workers losing their jobs.
America needs to overthrow our native royalty, the 1%, before we will have a chance of competing with the world again.