HP Cuts Execs’ Exit Packs
HP’s shareholders have expressed concern about the compensation the two previous CEOs received after leaving the company. Leo Apotheker received 156, 000 shares of restricted stock worth about $3.6 million at the time, and prior to that Mark Hurd received much more– a decision that in turn resulted in several on-going investor lawsuits.
This week The Wall Street Journal reports that HP finally responded by changing its policy concerning severance payments for executives, according to papers filed with the SEC. The new rules state that execs dismissed from the company due to poor performance or inappropriate actions won’t get to keep any restricted shares that aren’t vested at the time of their departure. It’s also notable that the new policy also applies to Meg Whiteman, the company’s current CEO.
This update was evidently enough for at least some shareholders, among other parties.
“H-P has responded to shareholder concerns regarding the outrageous severance packages received by its former CEOs,” said Brandon Rees, deputy director of the AFL-CIO’s Office of Investment. The labor federation has decided to drop a resolution asking for a shareholder vote to decide whether executives fired after a takeover should not be given accelerated equity awards in the future.
At least two senior executives have left the hardware maker in the past few weeks. The latest one is HP’s former chief counsel Michael Holston, who have now been replaced by David Healy until a permanent successor is selected. Healy has a lot of work ahead of him, which includes – among other things – the lawsuits concerning the terms of Mark Hurd’s departure.
Before Holston it was the senior director of webOS app development who left the company. Michael Rizkalla’s termination was not unexpected considering a sizable portion of the employees in the webOS business were fired earlier.
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