Posted by: Peter Burrows on April 5, 2005
Not long ago, Hewlett-Packard had a rep for being the egalitarian old fuddy-duddy of corporate compensation—devoid of the Hollywood-like pay packages granted to corporate stars at other outfits.
Well, it is now clear that HP’s board of directors is intent on making up for lost time in ruining its rep in this regard. First, they issued Carly Fiorina a $21 million severance package after firing her in early February. Then, they granted relative no-name CEO Mark Hurd a top-shelf package to come aboard on April 1. And most obscene of all, a government filing today shows that the board paid chief financial officer Bob Wayman a $3 million cash payment for stepping up to the interim CEO job for the 52 days in between.
To put this in perspective, Wayman's bonus works out to $2,400 an hour or $58,000 a day. Stretched over a full year, it translates to $21.4 million a year--within shouting distance of Alex Rodriguez' Major Leagues-leading $26 million a year contract. OK, Rodriguez had an off-year for the Yanks in 2004. But at least he signed up to play for the entire season. HP's board knew Wayman wasn't stepping up for any long-term commitment. From the moment Fiorina was ousted, the goal was to fill her spot in sixty days or so. And oh by the way, Wayman was already being paid handsomely for his day job. In 2004, according to government filings, he earned $1.5 million in salary and bonus--not to mention restricted stock currently worth $326,000.
Now, I've always been a big fan of Wayman. Known for his smarts, his integrity and his commitment to HP over a 30-plus year career, he was one of very few people in HP circles that maintained the respect of people on both sides of the divisive 2001 fight over the Compaq merger. And he seems to have provided an important stabilizing force when it was badly needed during his stint as HP's boss. "Bob did a great job of making sure that customers stayed comfortable with HP, and that employees remained focused on the task at hand rather than be distracted by the fact that there was a CEO search," says spokesman Mike Moeller. In fact, Moeller points out that the payment is in part in recognition of the fact that Wayman has wanted to retire for years, but was just sticking around to make sure he left HP on a solid footing. In other words, he was the well-meaning company man.
This payment requires me to don glasses with a far less rosy lens. After all, Wayman was added to the board when he became interim CEO--so he most likely had some say on this bonus. Certainly, he could have talked the board into a less obscene gesture of thanks.