Four union pension funds today filed a class-action lawsuit against Hewlett-Packard Co., Palo Alto, Calif., claiming the firm did not seek required shareholder approval for the estimated $21.4 million to $42.5 million severance package for former CEO Carleton S. "Carly" Fiorina. The suit claims Hewlett-Packard breached a company policy to "seek shareholder approval before authorizing the payment of any severance benefits in excess of 2.99 times the salary and target bonus of the terminated executive," according to the lawsuit, filed in U.S. District Court in San Francisco. Ms. Fiorina's severance exceeded the permissible amount by as much as $28.5 million, the suit stated.
"We don't know how much specifically was negotiated as part of her severance package," said Michael Barry, a partner of Grant & Eisenhofer, the law firm representing the funds. He noted some of her payment was pension benefit and sale of stock. "At least $21.4 million was negotiated as part of her severance," he added.
The suit was filed by the $1.1 billion Service Employees International Union National Industry Pension Fund; the $430 million SEIU Affiliates, Officers and Employees Pension Plan; and the $101 million SEIU Employees Pension Plan, all based in Washington. The fourth class-action plaintiff is the Indiana IBEW Electrical Workers Pension Trust Fund, Indianapolis.
Robert Serbin, HP spokesman, said company officialsdeclined to comment.