Wednesday, 23 July 2014

Hear the people.... sing

In the past days we gave received a number of interesting and sometimes conflicting opinions on the outlook for CSC employees.
A selection of these opinions have been consolidated into a separate posting to highlight their different perspectives.





I am isolated and suffering mobbing at CSC. I opened a case with Ethics and they forwarded the case to HR. Following CSC actual ethics HR does not reply to me after two months waiting. CSC wants to raise its share price by saving on layoff compensations by forcing people to quit. Illegal and unethical way to get a few millions mr ML. If you want to reduce the head count remember you can't ignore laws!


.                   21 July 2014 16:37
As well as being isolated and suffering you are also very naive.

How you could think that lodging a complaint with Ethics and HR would lead to anything other than more trouble for you is beyond me. Ethics Dept is there so that Lawrie can tick boxes on Corporate responsibility reporting requirements, not to help employees. HR is there to do what Lawrie tells them to do, not to help employees.

You have been reading too many CSC Corporate Manuals and watching too many CSC Corporate propaganda videos and webcasts. Grow up, get yourself a new job and stop believing in Father Christmas. 


          
            21 July 2014 17:52
   Well put .)

The point that has been missed by those in charge is that in treating employees in the appalling manner they have, as opposed to with dignity, sensitivity and respect/thanks for in some cases many years of loyal service, they have ensured that those leaving do so with bitterness/anger, and as a consequence those that are left feel no loyalty and no longer believe/trust in the leadership . 
Many leavers are re-employed with current CSC clients, many have been snapped up by competitors(nothing like handing to the opposition your best people on a plate as has so often been the case in the UK-HP are ecstatic as are other major clients!) -and CSC can hardly expect support from an embittered ex employee now operating within a client company when bids, rebids come around. ie you reap what you sow. 
Many clients/potential clients have expressed a preference not to work with CSC, in no small part due to the ethics (lack of)-after all as one client said, if that is how CSC treats its employees, what on earth can we expect as a client?
What is so sad is that it need not have been this way-it could have been handled so much better , resulting in ex employees supporting CSC from afar, and those that were left enthused to continue going the extra mile and feeling proud to work for a company that had ensured leavers were fully supported and left with dignity etc. 
As it is people now do the absolute minimum they can get away with-feeling CSC has destroyed their trust so they owe no loyalty to CSC . 
No one ever doubted the need for changes to be made, or the fact redundancies would be needed, but it is the appalling manner of handling the situation that has scarred CSC and its employees permanently-and the fall out from this mushroom cloud will be felt by CSC for years to come. 
It is not rocket science to understand how it could have all been so differently handled with positive outcomes for all-CSC, current employees, and past employees alike.


After being in scope for redundancy five times in two years, constant requests, nay demands, to take 5 days vacation, being treated like a child, lied to, no pay reviews, absolutely ridiculous bell curve appraisal system, likelihood of being moved to a low cost "pod", training requests denied, dubious management strategy and to cap it all when I see the remuneration the L1's are getting for basically hollowing out what was once a great company just to prop up the share price, I feel a little aggrieved to say the least.
Hurry up and make me redundant (I have too many years in to just walk away !) so I can move on to a company that actually values and respects its employees.
I have no loyalty to CSC anymore, they have succeeded in beating it out of me but I wont give them the satisfaction of walking. Until then I'll do my utmost to do as little as possible for as long as possible, as they have done to me.

After 9 years with CSC UK I had also been waiting 5 years for redundancy and have been in scope 5 times but always been told not to bother applying as I was an SME on several critical applications. Despite training may offshore staff to pickup the work (but that's another story) and being told from day one that offshoring was the strategy for our account. So last year I moved nearer London away from the locality of my job ready to either get VR or be moved to another CSC account. As CSC were a littled worried about me leaving the actually gave me a 1% pay rise! However, after exactly 12 month nothing had happened and my CV went out and in couple of weeks I had a job offer. I took the risk and saved CSC the expense redundancy payments, which was around 20 odd month salary. Obviously I jumped to a much better paid job in London to compensate a little for the loss of the payoff. Anyway 6 months on I hear that many of the managers at my old account have got VR but the SME's and technical guys have been refused due to the lack of resource and also that some stuff still can't be offshored due to various legal reasons. So I would have still been stuck in CSC anther 2-3 year waiting for a payoff. Something to think about here is as you get older you can find it harder to get another job, CSC may find ways of reducing the current Redundancy deals on accounts like mine where you get one month per year. So waiting for a payoff could back fire in the long run so think hard about how long some of you guys may need to wait. I'm now working in a newish small Finance IT company and although it can be hard work and less organised than a bigger company, you have the potential to get rewarded such as decent pay rise, bonuses training and most of all not feeling like you are an expense to the company and have not future.



Wednesday, 2 July 2014

Lawrie 'suffers' pay cut of almost 40% to US$ 13.2 million in FY2014

As several of our correspondents have noted, CSC recently issued its FY2014 Proxy Statement which can be seen in the Investor Relations section of the CSC website.

The proxy contains much information, including details of senior executive compensation. Here are some salient items:

·       Mike Lawrie’s total compensation for FY2014 was US$ 13.2 million, almost 40% below the US$21.3 million he earned in the previous fiscal year. He received 116% of his target annual incentive bonus, despite the company missing its revenue and operating income targets.
·      He has unvested stock options worth US$14.8 million.
·      If he is terminated after a change of control of CSC, he is contractually entitled to severance payments of US$34.3 million. If terminated (other than for “cause”) without a change of control he is entitled to US$14.5 million.
·      
    The CSC executives’ annual incentive bonuses will no longer be capped at 150% of on-target, which amount required achievement of 120% of financial objectives. In future it will be possible to earn 200% of the on-target bonus on achievement of 150% of financial objectives.
·      
    David Zolet received an increase in base salary from 
    US$475, 000 to US$550,000 to 'bring him up to market median'.
·      
    The company’s revenue target for FY2014 was US$14.252 million, of which it achieved US$13.079 million or 92%. The operating income achieved was US$1.315 million, being 93% of its target of US$1.421 million.
·     
   The SEC investigation into CSC accounting irregularities and the accounting for the NHS program is ongoing. However, the company has settled the five Class action lawsuits brought against it and former CEO Mike Laphen and others for allegedly misleading investors about the true situation of the company’s finances. 
    There is also currently the law suit from employees claiming for unpaid overtime. For details see this link

The questions these points raise for us:

·      What justifies the differing standards of treatment between the normal employees and senior executives? There are probably thousands of CSC employees who are paid below market who, unlike Mr Zolet, received no pay adjustment; there are no doubt many CSC employees with truly outstanding performance whose bonuses have been cancelled, while the senior executives enjoy an increased bonus ceiling;  employees who fail to achieve two of their their three major objectives will be rated as “not meeting requirements”  in the famous performance bell curve, yet Mike Lawrie misses his revenue and operating income targets but gets 116% of his target incentive and in July 2014  gets an additional  special off-cycle us$2.5 million stock bonus for “outstanding performance”.  

This culture of dual standards is not unique to, nor even new to CSC. The five years preceding Mike Lawrie’s arrival at CSC were marked by one set of standards being applied to the workforce and a different set of standards enjoyed by the CEO and his acolytes.

·      
    Is Mike Lawrie’s performance worth the US$ 35 million compensation he has collected in the past two years? A shareholder would probably say he is worth it. The weighted average stock price of CSC in the 3 months before his arrival was just above US$28 per share. During his 2 year tenure, Mike Lawrie has boosted the share price by over 100% and sustained it at that level long enough to allow shareholders the opportunity to sell their holding in CSC at a good profit, or at the very least to recover the significant losses in shareholder value suffered during the tenure of previous CEO Mike Laphen.   CSC employees will no doubt be much less enthusiastic about Lawrie’s achievements with good reason. But unfortunately for employees and customers, the Board of Directors put in place a compensation framework which rewards Mike Lawrie richly for boosting the share price, not for rebuilding CSC, nor satisfying customers, nor for earning the respect and loyalty of employees.
    CSC has 'form' in this regard as those of you with long memories will remember from this earlier post 



·       So where is CSC going? We continue to believe Mike Lawrie’s strategy is to keep CSC share price as high as possible in view of a sale or break up of the company. This means keeping the Earnings Per Share as high as possible at all costs. Nothing we have heard suggests CSC is rebuilding or strengthening its position on the market.  Revenue is declining, sales performance is disappointing, recompetes are being lost to competitors,  highly skilled technical staff are leaving, voluntarily or forcibly,  and value is being hollowed out of the company to prop up quarterly profitability. Thus the high share price.  


    It is notable that CSC missed its revenue target for FY2014 by fully 8%, showing that Mike Lawrie had expected and planned for revenue growth in the year, not the continuing decline we are seeing.  For these reasons, and what we hear from our correspondents, we do not believe CSC’s current profit and share price are sustainable, thus we continue to be skeptical about CSC’s future.