A pair of pension funds have filed suit against HP alleging that the company was more than a wee bit too generous in outfitting Carly Fiorina with a golden parachute — reportedly worth “a combined $42 million in severance and other payments” — before pushing her out the door last year.
From a press release issued by the Delaware law firm Grant & Eisenhofer:
“The suit, filed in U.S. District Court for the Northern District of California, was brought by the Indiana Electrical Workers Pension Trust Fund, and pension funds administered by the Service Employees International Union (SEIU). The funds brought the action as both a derivative and class action on behalf of the company and other HP investors.”
“The Indiana pension fund and SEIU accuse Hewlett-Packard of violating a company policy not to approve severance packages exceeding 2.99 times the sum of an executive’s annual base salary (plus target bonus) without first seeking shareholder approval. The agreement was put in place in 2003 following widespread shareholder dissent over a $16 million payout to former HP president Michael Capellas.”
HP public relations said the company would have no comment. I didn’t bother to try tracking down Fiorina, who when heard from was bopping around the country giving speeches and not talking to reporters.
It’s always easy to criticize these cushy executive parting gifts, especially when they’re bestowed upon CEOs who didn’t exactly deliver the goods. Of course, just because it’s easy doesn’t make it wrong.
And here’s my question: If an employer is going to give you $42 million just to go away, who in their right mind would want to stay?
