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Tuesday, November 20, 2012

If Only HP CEO Meg Whitman Had the Chance to Run California "a Little Bit More Like a Business"

Posted by on Tue, Nov 20, 2012 at 3:14 PM

It is always fascinating to watch the invisible hand of God work its market magic:

Hewlett-Packard stunned Wall Street by alleging a massive accounting scandal at its British software unit Autonomy that will cost the company the majority of $8.8 billion in charges.

It was the latest in a string of reversals that have renewed questions about the basic competence of the storied company's board and senior managers. ... The charge follows a nearly $11 billion writedown last quarter for the company's EDS services division.

Yup, nothing allocates resources more efficiently than the private sector. That's why the top executives and board members at HP who were responsible for executing this deal have all been so extraordinarily well compensated. Former HP CEO Leo Apotheker, who initiated the acquisition, earned $30.4 million last year. Current CEO Meg Whitman, who closed the deal, and who approved the deal as a board member, earned $16.5 million last year for just a few months work. Chairman of the board Ray Lane, who hired and quickly fired Apotheker, and who has presided over a string of disastrous acquisitions, earned $10.6 million last year in exchange for his shrewd business insight.

All hail the job creators!

"Most of the board was here and voted for this deal, and we feel terribly about that," says Whitman. Well, as long as they're sorry. I guess that's okay then. And besides, it's not like they didn't do their due diligence:

"The board relied on audited financials, audited by Deloitte. Not Brand X accounting firm, but Deloitte," [Whitman] said, adding that KPMG was hired to audit Deloitte.

That's right, they hired a name brand auditor to audit their name brand auditor. Whitman and the rest of the HP management team did everything right! That's why I betcha California voters are kicking themselves right about now for not electing Whitman governor and taking her up on her promise to run state government "more like a business":

 

Comments (13) RSS

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rob! 1
This Californicating voter thanks Minerva every goddamn day that we dodged that bullet.

And hey, despite our famously dysfunctional legislature and propensity to make laws via the ballot box, we're on the verge of a budget surplus.
Posted by rob! http://www.youtube.com/watch?v=QZBdUceCL5U on November 20, 2012 at 3:39 PM
rob! 2
Also, we enacted legislation that mirrors Obamacare on the state level and are cheerfully forging ahead with adding millions of former potential deadbeat ER patients to the Medi-Cal rolls, well in advance of Jan. 2014 or whatever date the Obama administration pushes the deadline back to satisfy whiny Republicans.
Posted by rob! http://www.youtube.com/watch?v=QZBdUceCL5U on November 20, 2012 at 3:45 PM
3
Shrew business, for sure!
Posted by Daily in LA on November 20, 2012 at 4:03 PM
4
Please stop saying that these CEOs "earned" their multi-million dollar salaries. They may have been paid that much, but they didn't "earn" it the way 'real workers' 'earn' their paychecks.
Posted by SuperSteve on November 20, 2012 at 4:26 PM
5
What Robt @1 and @2 said. In spades. Those of us who had watched Whitman's "management" at other corporations are so grateful she's not in the capital.
Posted by Calpete on November 20, 2012 at 4:35 PM
Fnarf 6
To be fair to Whitman, she's the one reporting this fraud, not the one who committed it, or the one who bought the stupid thing in the first place. Apotheker is the genius who pulled off that coup, stripping HP of $30 billion of its market valuation in the process (not including today's writeoff, or today's market cap crash) -- for which he was punished with a $3 mil bonus on top of the rest of his golden parachute.

If this proceeds as a legal matter in the courts, which I hope, it's going to be Apotheker who stands in the dock, not Whitman.

I'm not boosting her CEO skills any; just giving uncredit where uncredit is due.
Posted by Fnarf http://www.facebook.com/fnarf on November 20, 2012 at 4:40 PM
Supreme Ruler Of The Universe 7

So SLOG now supports an asset tax...right?

Posted by Supreme Ruler Of The Universe http://www.you-read-it-here-first.com on November 20, 2012 at 4:49 PM
8
At this point I am impressed with the admitting of error.

There are a bunch of people in power who wouldn't acknowledge any error under any circumstances: including decisions directly resulting in Chapter 7.

I used to have higher standards.

Posted by david on November 20, 2012 at 4:51 PM
Dougsf 9
I've been waiting for someone to jump on this. HP has a few acquisition doozies like this under her leadership.

I don't know why so many people insist—seeking a more difficult challenges? ego?—that the success they had in business best qualifies them to govern any more than an NBA player's training would make him a better astronaut.
Posted by Dougsf on November 20, 2012 at 4:51 PM
Doctor Memory 10
Fnarf beat me to it. I bow to no man in my loathing of Meg Whitman, but this one is in no way her fault: this is all on Leo Apotheker and the idiots at KPMG and Deloitte, neither of which company I expect to exist this time next year.
Posted by Doctor Memory http://blahg.blank.org on November 20, 2012 at 5:06 PM
11
B R E A K I N G - HP Acquisition fails miserably.
Posted by MikeBoyScout on November 20, 2012 at 5:08 PM
12
Hmmmm....you mean like these creatures below?

http://www.zerohedge.com/contributed/201…

http://www.zerohedge.com/news/2012-11-20…

(Yo, Goldy dood, please take Paul Constant aside and slap him around a bit, to get the word to him to quit mentioning the name of that pile of useless bullcrap, Mitt Romney.

We're sick of hearing about the Twitt and the Moron Church!)
Posted by sgt_doom on November 20, 2012 at 5:10 PM
13
Economist Richard Wolff does a great riff on the more general philosophical folly of efficiency.

"Efficiency is a method of browbeating your political and ideological rival into believing that there is a final resolution to your debate; an absolute truth that all of your disagreements have to bow down to."

http://www.vidoevo.com/yvideo.php?i=NEQz…
Posted by Tent_Liberation_Army on November 21, 2012 at 9:48 AM

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