HP dumpster to PE fundster
By now, we've all hear about the Mark Hurd scandal . But what hasn't been mentioned as readily is the axed-CEO market.
Other than jail or a prominent role in facilities engineering at the same company, where is a C-level exec to go once he becomes the media's latest lynch puppet burning in effigy?
In the case of Mr. Hurd, Private Equity may be the likely destination. In a week when another controversial veteran went small market , perhaps the low-key, high-stakes world of PE will be enticing to a man like Hurd.
Hurd's job at HP was essentially distressed asset management on a multinational scale. After taking the rains at the faltering computer giant in April of 2005, Hurd tripled profits via various strategies including the right mix of acquisitions and decreased real estate holdings. For those who remember how low HP was on the corporate respect totem pole 5 years ago, this guy's job remains one of the down-low managerial gems of the last decade.
Though the details about the affair haven't come to light, I think this situation can be looked upon as an example of a potentially positive shift in the overall macro structure of American business.
As big corporations further succumb to PR related pressures, more and more Type-A execs will be getting the chances to test the free agent market. I for one am confident that many of these men and women will thrive outside of the bureaucratic microscopes of the modern day corporatocracy.
Small business is what made this country great, though the large M&A wave of recent memory put a nice bonus wallop in many of our/our colleague's pockets, it has also created a corporate economy which intrinsically links itself with government, helping to grow the machine rather than decrease it.
The issue many ignore (or don't even realize) in today's stagnant economic world is the need for creativity and new products/services. This does not necessarily entail reinventing the wheel, sometimes fixing what is broken is good enough.
Mark Hurd has that skill set and I hope he puts it to good use.
Here's to a world where the rich and powerful who have busted their humps to get to the top can enjoy their humps without being ridden like camels. Ching ching!
Amen.
Bloomberg TV ran this last night... apparently he is a savvy cost cutter as well. HP is like the ninth biggest company in the nation, so that is quite a big move.
Great post M^3
Gentlemen,
I quote the urban philospher Christopher P. Stone, better known as Chris Rock...
" a woman's test in life are things, a man's test in life...IS A WOMAN".
Now if this guy and guys like him are doing a killer job and returning your company from depths of irrelevance to the near total market domination...ain't it okay to let him dip the cookie in company milk from time to time?
Think about how much we'll be depressing the economy further if horny, ambitious, Type-A's feel like they can't indulge their vices w/o fear on public castration...where will the motivation to climb the corporate ladder come from???
Give me six Jodie Fishers, six six-packs and you can keep you six-sigma!
Now I'm not an expert on HP but I do want to mention that not everybody shares the enthusiasm about Hurd's performance.
http://jeffmatthewsisnotmakingthisup.blogspot.com/2010/08/hurd-instinct…
""HP is, after all, a $100 billion-a-year company with more than 300,000 employees manning far-flung operations across the globe. Two-thirds of its revenues are derived in foreign currencies that fluctuate every day.
Not only that, but four of the company’s five major businesses experienced sales declines of 20% or more in the quarter. Of the five businesses, one looks doomed to eventual irrelevance (personal computers), a second looks doomed to brutal competition as far as the eye can see (servers and storage) and a third is exposed to the kind of technology shift that brought about the collapse of the aforementioned Eastman Kodak (printers.)
Oh, and the one business that showed growth in the quarter did so entirely thanks to the fact that the company spent $13 billion buying EDS, in a deal that closed one year ago tomorrow.
With all that going on, one might reasonably wonder how in the world it is possible for anybody, even the heroically numbers-obsessed Mr. Hurd, to beat “The Number” by the requisite penny? The answer—aside from brutal cost-cutting—is that HP waves “Non-GAAP” earnings of 91 cents a share, up nicely from last year’s 86c a share, in front of Wall Street’s Finest, thus distracting the thundering herd from actual GAAP earnings, which are more of a downer.
Like, 25% more of a downer.
That’s right: HP’s July quarter GAAP earnings were only 67 cents a share—25% below the 91 cent so-called “Number” used by HP management and Wall Street’s Finest—and down, not up, from last year’s 80 cents a share GAAP earnings.
—JeffMatthewsIsNotMakingThisUp, August 25, 2009 ""
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