The other reason Hurd got ousted: Discontent among HP rank and file

The other reason Hurd got ousted: Discontent among HP rank and file

Summary: There could be more to former Hewlett-Packard CEO Mark Hurd's ouster than just a hit to his reputation over a sexual harassment probe. He was not well-regarded among the HP rank-and-file, and it may have come back to bite him.

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There could be more to former Hewlett-Packard CEO Mark Hurd's ouster than just a hit to his reputation over a sexual harassment probe. He was not well-regarded among the HP rank-and-file, and it may have come back to bite him.

Hurd (right) resigned as the company's chief executive last week under pressure from the HP board of directors over an investigation of alleged sexual harassment and fudging expense reports.

The whole saga turned a bit bizarre as Hurd settled with the alleged victim, an HP contractor who expressed sadness that Hurd lost his job. Then, Oracle CEO Larry Ellison publicly defended Hurd and basically called the HP board cowardly and idiotic for firing him.

The primary motive being ascribed to the HP board is their fear of media fallout once the press got a hold of the Hurd story, especially since the former HP contractor had hired high-powered attorney Gloria Allred.

But, there may have also been other forces at work. Although Hurd was reportedly in negotiations for a new contract before the sexual harassment allegations came to light, there has been growing discontent with Hurd inside HP.

After taking over for Carly Fiorina as HP CEO in 2005, he helped the company get its financial house in order and in the process grew revenue by 30% and tripled HP's profits. But, Hurd did it with a brutal scorched-earth policy of cost cutting and consolidation that demoralized many of the company's 300,000 employees.

According to the non-scientific polling of employees at Glassdoor.com, Hurd had the lowest employee approval rating of any of the CEOs of big public technology companies (see chart below).

You can't blame HP employees for feeling anger and resentment toward Hurd. Beyond his sweeping layoffs, much of the bad blood stems from Hurd's duplicitous salary cuts in 2008. As The Street explained, Hurd and the HP management team "mandated that year that all Hewlett-Packard staffers would take a 5% pay cut for the year, and they boasted that they -- as executives -- would stand shoulder to shoulder with the staff by taking 10% pay cuts. They forgot to say that the executive cuts would be only on base salary and that they would more than make up for that on options, restricted stock units and other bonus goodies."

In fact, the HP management team actually increased their compensation in 2008, according to The Street:

- Mark Hurd's total compensation for 2008 (when the global economic crisis reached its nadir) was $43 million, making him the fourth-highest-paid CEO that year, even though HP's shares lost 29% that year. - CIO Randy Mott's total compensation jumped 400% that year to $28 million. - Imaging executive vice president Vyomesh (VJ) Joshi's total compensation increased 83% in 2008 to $22 million. - Personal Systems EVP Todd Bradley's total compensation went up 263% that year to $21 million. - Technology Solutions' EVP Ann Livermore's compensation went up 31% that year to $21 million. - Now-interim CEO Cathie Lesjak got a 49% bump in total compensation in 2008 to $6 million.

This should serve as a cautionary tale to business and IT executives. Great leaders don't deceive or sell short their workers. For good advice and best practices, take a look at TechRepublic's Career Management blog and IT Leadership blog.

This article was originally published on TechRepublic.

Topics: Hewlett-Packard, CXO, Legal, IT Employment

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11 comments
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  • Empty Suit

    Hurd let Apple beat HP to the tablet market. He fostered a duplicative product line (ala Compaq) and has failed to generate any youth-enthusiam for HP products. HP laptops haven't come one inch in years; they're still the same old bulky, stodgy, old-man style machines that they were five years ago.

    In my opionion, Hurd is a throwback to the days when companies could afford empty suits like him.
    trickytom2
    • RE: The other reason Hurd got ousted: Discontent among HP rank and file

      @trickytom2
      Have you seen the $hit coming out of Dell. Their entire product line is nasty. And that's if they are not scamming you with the components inside.
      itguy08
  • RE: The other reason Hurd got ousted: Discontent among HP rank and file

    Well Corporations do not care about the workers only their stock performance, so I do not think that is the reason.
    mrlinux
    • Don't be so sure.

      @mrlinux HP Insider blogs have mentioned that the results of HP's every five years internal survey, <i>Voice of the Workplace</i>, showed that more than 2/3 of HP employees would take an equivalent position <i>anywhere else</i> if one were offered. Senior management can be, and often is, ambivalent to employee satisfaction in the abstract, but numbers like that are sobering, to even the most jaded executive.
      matthew_maurice
  • HP used to be considered one of the best places to work

    Not any more. My son used to work for HP as a field service tech, but after their various cost cutting moves impacted his pay and increased his workload, he jumped ship to another company. He has kept in touch with his former coworkers, and most of them are looking to bail out as well.

    While upper management is justified in keeping the company lean and mean for profitability, they sometimes lose sight of the fact that it is the workforce that actually makes the wheels spin. Increasing profits at the expense of the workers is short sighted and damages the company over the long haul.
    itpro_z
  • I guess folks shouldn't expect a raise

    anytime soon with HP's $1b WebOS acquistion. Hope that works out for them okay. I'll never understand this move, weren't they happy with their #1 position.
    USArcher
  • RE: The other reason Hurd got ousted: Discontent among HP rank and file

    Good article. It's too bad the article couldn't point out the common nickname for Mark Hurd used by employees.
    staceycurtis
  • RE: The other reason Hurd got ousted: Discontent among HP rank and file

    It seems that the stockholders could deman full disclosure of the true reason or return of the severance package.
    hpstkhldr
  • Hurd shows he is a Cheap Ass

    Hurd made over $100M over the past 5 to 7 years with his anal retentive, prudish, selfish behavior ? and it caught up with him! He was too cheap to pay for a weekend date with a washed up soft porn starlet.
    What a frick?n idiot and cheapskate.
    gwbdopesmoker
  • The rich keep getting richer

    [i]They forgot to say that the executive cuts would be only on base salary and that they would more than make up for that on options, restricted stock units and other bonus goodies.

    In fact, the HP management team actually increased their compensation in 2008, according to The Street:

    - Mark Hurds total compensation for 2008 (when the global economic crisis reached its nadir) was $43 million, making him the fourth-highest-paid CEO that year, even though HPs shares lost 29% that year. [/i]

    and the poor keep getting ... ah what's the point. No one who "matters" gives a hoot. They're all in bed together, snug as bugs in rugs (that is, when they're not toasting each other at country club shindigs and various "charity" gatherings).

    Capitalism 2.0 may end up morphing into revolution 2.0, only of the truest sort once again (would be nice to purge most of those federal hacks and lickspittles grazing on their asses in DC in one fell swoop to boot). That would be patriotism at its finest.
    klumper
  • Good Riddance to Bad Management

    As someone who worked at HP for 5 years I can confirm that he was by far the most hated man in the company. He took HP from a vibrant, exciting and innovative company to a shell of it's former self. While he may have cut costs and increased share prices the low morale and salary freeze has led to the most skilled and dedicated employees leaving to be replaced by cheap, offshore and often unskilled labour.

    I finally left after becoming embarrassed by the quality of service we were providing. HP have become a sad joke - and it become quite clear from speaking to other IT professionals that the sorry state of affairs there has become widely known.

    Or maybe I'm still bitter!
    Cambowski