HP board on the chopping block; 457 visa causing salary drop?

Several members of HP’s board of directors may be axed after several influential advisory firms called for their ousting last week, based on their accrual of US$17 billion losses for HP.

HP directors John Hammergren and G Kennedy Thompson are two of the eleven directors seeking to be re-elected at HP’s March 20 annual meeting.

But two advisory firms, Institutional Shareholder Services and Glass Lewis & Co, are calling for HP shareholders to vote against Hammergren and Thompson.

New York City Comptroller John Liu recently declared that Hammergren and Thompson are responsible for approving several poor acquisitions that led to US$17 billion losses for HP.

The CtW Investment Group has also urged HP shareholders ditch Hammergren and Thompson. The organisation released a statement (PDF) saying Hammergren “bears particular responsibility for HP’s string of unsuccessful acquisitions as well as for the flawed process leading to the Autonomy merger. During Mr Hammergren’s tenure, HP has pursued acquisitions including EDS, Palm and Autonomy that have resulted in approximately [US]$19 billion in write-downs, strongly suggesting that HP was overpaying for these companies.”

HP bought 87% of Autonomy for about US$10 billion in 2011, but the new purchase did not perform, with significant revenue drops post acquisition. HP then alleged that Autonomy had misrepresented its finances prior to the sale.

CtW said shareholders should dump Thompson as he “bears primary responsibility for the board’s willingness to tolerate unusually high non-audit fees paid to Ernst & Young, HP’s independent auditor”, according to the group.

The group also called for the dumping of Ernst & Young as independent auditor.

ISS also opposes the re-election of HP chairman Ray Lane, while Glass Lewis is asking shareholders to vote against the re-election of Marc Andreessen and Rajiv Gupta.

Despite the calls, David Eaton, vice president of research at Glass Lewis, said it was rare for directors to not get elected.

HP spokesman Howard Clabo said: “The board fully supports the election of each of the director nominees named in the proxy statement.”

457 visas causing IT salary drop?

Growth in 457 visas - which allow foreign workers to work temporarily in Australia - has caused a drop in IT salaries, according to the federal Minister for Immigration Brendan O’Connor.

O’Connor has accused Australian businesses of using the 457 visa program as their first option to fill positions. Prime Minister Julia Gillard backed up his statement, saying she was concerned the program was being abused by employers and Australian workers were missing out on jobs.

O’Connor said the number of 457 applications is growing faster than the country’s total employment rate.

He went on to say that the IT sector had received the most 457 visas and salaries had dropped as a result.

“We have seen over several years a fall in real wages between five and 12% in those positions held by (IT) applicants,” he said.

However, according to SMH writer Michael Pascoe, the ‘Information Media and Telecommunications’ category is only the fourth highest in terms of 457 visas granted.

Pascoe also said O’Connor’s comments about IT salary drops don’t “seem to gel with the tone” of a recent Hudson report (PDF) into ICT salaries.

Indeed, the most recent annual ACS figures (PDF, released September 2012) indicate that “average salaries paid to employee ICT professionals rose by an average of 3.9% over the 12 months to May 2012”.

Perhaps O’Connor has more up-to-date or more accurate figures than the ACS and Hudson. Perhaps he simply got caught up in the moment. We’ll see once organisations release their 2013 salary reports.

Image credit ©iStockphoto.com/Ravi Tahilramani