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 naïve. 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: