Massive severance packages are nothing new, but sometimes you just feel the need to call attention to them. Ousted HP CEO Leo Apotheker is leaving the company with a $7.2 million severance payment, plus a $2.4 million bonus and $3.7m in stock (more if you count the other 440,000 vested shares). I understand that this high pay is part of our business culture, but really, now.
Is it possible that HP was in a death spiral and only Apotheker’s sound judgment caused them to get away with a mere 45% drop in value? It seems unlikely that they’d kick him to the curb after less than a year if that were the case.
But no, he’s leaving with millions in cash and stock , and HP will even be paying for the lawyers who negotiated the package, and they’ll pay up to $300K if he feels like moving.
Of course, I wouldn’t have wanted to live that year in Apotheker’s shoes. He faced some extremely difficult decisions and massive internal changes following the acquisition of Palm. The best of men would have struggled. But his handling of Palm and webOS is wide open to criticism. It was a billion-dollar deal that needed to be shaped while it was hot, and (although there was certainly a good amount of internal politics that had to do with this as well) he didn’t do that, and now it’s a billion-dollar boondoggle. Perhaps Hurd’s ambition is partly to blame as well, but I don’t think many would compliment Apotheker’s work in this critical area during his reign.
His big move to split up the business was certainly ballsy, but so was the charge of the light brigade. HP’s customers and the market both found it a disturbing development, the world’s biggest PC company flailing about like that. Acer too has publicly admitted its entire strategy needs revision, but it was done with caution and humility.
I’ll stop there before I naively dig myself any deeper. But I just wanted to register fresh astonishment at this culture that throws money away like this. I’m surprised Apotheker was allowed to leave with his skin.
All the information is here in this SEC filing, if you’re curious.