Monday, 13 August 2012

Questions about Mike Lawrie as CSC gives 50% increases in retainers for its failed Board of Directors




CSC has further increased the generous remuneration of its non-executive directors, an SEC filing of August 10 has disclosed.


They will each receive an annual cash retainer of US$90,000, (up from US$60,000) plus an annual grant of shares worth US$135,000 (up from US$125,000); there are additional retainers ranging from US$10,000 to US$25,000 for serving on the various committees of the Board, plus provisions for attendance fees.


This is quite amazing, coming just days after CSC’s CFO told the Wall St analysts about the positive impact on cash flow of the decision not to pay certain FY2012 employee bonuses.


The non-executive directors are the group which appointed Mike Laphen as CEO in 2007 despite the evidence that he did not have the appropriate skills. They aggravated that error by investing all executive power in Laphen, naming him Chairman, CEO and President.   They then brought in the retired Mike Mancuso as CFO, with the consequences we know.


They watched but took no action as Laphen’s mismanagement started destroying CSC, leading to a drop of over 50% in CSC’s share price and to thousands of employees losing their jobs. They watched the financial meltdown, the accounting irregularities, the SEC investigation, the Class Action lawsuits, the reputational damage of the NHS fiasco and the torture/rendition allegations and did nothing. They watched competitors grow as CSC moved backwards with no revenue growth and no vision of the future. They watched as their chosen CEO micro-managed expense detail while CSC headed for disaster.  They watched while CSC alledgedly supported anti-humanitarian rendition flights. They only acted to remove Laphen when it was clear his position was untenable. He had lost credibility with the customers, the employees, the IT industry and with Wall Street.


The Board of Directors should have recognized their responsibility for CSC’s situation and offered their resignations. Instead they stood for re-election and have now voted themselves a massive 50% increase in their base retainer compensation.


We have mentioned in earlier blog entries our hopes that recently-appointed CEO Mike Lawrie would turn CSC around and deliver on his plans to create a new set of values and behaviors.  


We are hugely disappointed that he has allowed these increases in non-executive director compensation to happen.   Massive rewards for failure at the top of CSC while screwing down employee compensation was part of the Laphen culture. We hoped Lawrie would represent the wind of change. Maybe our hopes are na├»ve. Maybe Lawrie is just a Laphen clone but with a bit of charisma.   These increases when employees are being laid off shows a total lack of sensitivity.


Full details of the SEC filing  in question can be found on:

8 comments:

Anonymous said...

seems
F. Warren McFarlan
Thomas H. Patrick

have disappeared from the Board though....

http://www.csc.com/governance/ds/21933-board_of_directors

Anonymous said...

As an employee who did not get a bonus this year, nor last, I am disgusted to learn that our top executives are now lining their pockets with yet more cash. I am one of those who cannot directly influence the financial success of CSC, other than the 50 or 60 hours a week I work, so am being punished yet again for senior management incompetence within CSC. My "bonus" is more like salary that is withheld by CSC, and paid if they do well (which I am OK with), but surely if we are doing well enough to pay those top execs, then we are doing well enough to pay employees who bring in the cash to pay the top executives.

Anonymous said...

As an employee who did not get a bonus this year, nor last, I am disgusted to learn that our top executives are now lining their pockets with yet more cash. I am one of those who cannot directly influence the financial success of CSC, other than the 50 or 60 hours a week I work, so am being punished yet again for senior management incompetence within CSC. My "bonus" is more like salary that is withheld by CSC, and paid if they do well (which I am OK with), but surely if we are doing well enough to pay those top execs, then we are doing well enough to pay employees who bring in the cash to pay the top executives.

Anonymous said...

Laphen was totally incompetent and so is the board of directors. Now the health care plans are nealry tripling costs for employees.

Anonymous said...

CSC never treated their employees well. They only paid themselves with big salary and big etc.. The employees, in their eyes, are a necessary evil.

Anonymous said...

The flood gates are opening ... high quality resources are fed up and heading to greener pastures. HR policies continue to kick the revenue generating employee asset base in teeth with outlandish health care cost increases that are a thinly disguised contribution to the bottom line right out of the employee's pocket.

RamTheSkiver said...

I like your site. Very nice and informative. Not like my infamous Mike Lawrie parody account on twitter—RamTheSkiver.

I see Mike is back to his old tricks. Nothing is more insulting as when your employer insults your intelligence and lies to you.

But shareholders have a tendency to think verbatim, and Mike Lawrie is very good at selling himself to peanut-galleries as the CEO who increases shareholder value. USA USA USA! He launches a campaign of cost-cutting, but gives himself and his allies fat bonuses. He may even dabble in "corporate social responsibility" and (fake) innovation; Anything that presents himself in a good light and makes enough noise to confuse/distract those outside the company.

Mike makes rules and breaks them immediately, because he doesn't care about the company—He just wants to make a quick buck. Direction changes by the minute and chaos ensues. The minions of Lawrie justify it as "Agile".

When the company goes to seed and products fall apart, when Lawrie's minions can no longer "Agile" their way of out the mess, Mike Lawrie collects $10 million in bonuses & exit fees and finds yet another sucker.

Do you see a pattern here?

Anonymous said...

It is sad to see a company with great potential squander the resources [talented employees] while giving the very people who have put the company in jeopardy outrageous bonuses for their incompetence. As an employee, I did my job well but received an email informing me that I didn't exceed expectation in all areas so I would not be getting an increase this year.
Good people are leaving this company so that the old cronies can continue to 'rob' the company.