So, two Hewlett-Packard shareholders filed the seemingly inevitable lawsuit yesterday against the company contending that a $21.4 million severance package provided to former CEO Carly Fiorina violated the company’s policy on executive compensation. Previous posts on Fiorina’s reign at HP are here.
Although the corporate case of decade would appear to be fairly persuasive authority for dismissal of this lawsuit, the cause of action might survive simply because of a dispute over the technical issue of valuation of Fiorina’s severance package.
Nevertheless, as I recall, HP stock was trading at around $19 per share at the time of Fiorina’s forced resignation in early 2005. The stock closed at $32.96 yesterday. Rather than criticizing the severance package for Fiorina, shouldn’t HP shareholders be celebrating the wisdom of the HP board in cutting Fiorina loose even with a generous severance?