Computing giant Hewlett-Packard (HP) has implemented pay cuts in order to increase flexibility in its cost structure, with the CEO Mark Hurd taking a 20pc pay cut and the majority of workers taking a 10pc pay cut.
Across HP, executive council members will see their base pay cut by 15pc, while other executives’ pay will be cut by 10pc, exempt employees’ base pay will be cut by 5pc and non-exempt employees’ base pay will be cut by 2.5pc.
In terms of pensions, HP said it will cap its matching contributions under the HP 401(k) Plan at a maximum of 4pc of eligible employee contributions for all US employees, and matching contributions will be discretionary based on company performance, determined on a quarterly basis.
Participants in the HP Share Ownership Programme will no longer be able to purchase HP shares at a discount to fair market value.
“While the actions that we are taking today are difficult, we believe they will allow us to emerge from this recession in a powerful position to create value for our customers, employees and shareholders over the long term, and be in a better position to fund 2009 bonus programmes,” HP remarked on the pay cuts.
HP last night reported a modest 1pc rise in first-quarter revenues of US$28.8bn, with operating profits down 5pc to US$2.5bn.
“HP is a market leader executing well in a tough market,” said Mark Hurd, HP chairman and CEO (pictured).
“Our market strength, disciplined cost management and diverse portfolio allowed us to differentiate HP in the global marketplace and gain share in key markets,” Hurd added.
By John Kennedy
Pictured: Mark Hurd, HP chairman and CEO