Hurd himself is taking a $290,000 pay cut, or 20 percent of his salary, which would look more impressive had his pay not risen 31 percent last year. HP executives are getting their pay cut 10 percent, though they can better afford it than the economically strapped rank and file.

With Congress putting executive pay under the microscope, it's a well-timed publicity stunt. The net effect on HP's financials will be small. But it's more than just a flashy PR move: It is putting a theory touted for decades in academia into practice at an unprecedented scale.

MIT economist Martin Weitzman suggested in the 1980s that instituting pay cuts instead of layoffs could make recessions shorter and less painful. By setting base salaries lower and making pay more variable with a business's financial results, companies could avoid cutting jobs and increase workers' rewards in good times. HP is trying exactly that, with a change to its bonus plans that could make up for the pay cuts if times do well.

HP is not alone. Teamster-represented truckers at YRC recently agreed to a 10 percent paycut. AMD, a Valley-based chipmaker, has instituted "temporary" pay cuts (as opposed to HP's permanent ones).

But HP, the 14th-largest public company by revenues in the U.S., has given license to the rest of the Fortune 500 to consider the idea.

It will hardly mean an end to job losses. HP is still in the middle of a three-year, 25,000-person layoff stemming from its acquisition of EDS, a rival tech-services outfit. But it could spell a future when people are laid off because their jobs truly are redundant, not because times are, as corporate memo-writers love to say, "tough all over."

There's only one problem we see with this idea: Wall Street was famous for its highly variable pay. The bonus plan may have worked for a while, but it did not end well. The high-risk, high-reward system is thoroughly out of favor now. Are we ready to become a nation of workplace gamblers? Or will America's corporate culture face death by a thousand cuts?

VeriSign chairman Jim Bidzos
An employee's advice to senior management:

Don't drag out the divestiture process in an effort to get a few extra bucks. And if you're going to kill the whole thing, be honest with employees about opportunities.

AMD chairman and CEO Hector Ruiz
An employee's advice to senior management:

AMD needs to go back to basics. What business is AMD in, who do you need onboard to lead the company in that business, who do you need that can create demand for the product, and what do the customers want? Ignore the "how" and focus on the "who." Stop treating employees like costs and more like assets. Threatening cubical hoteling and pushing the "do more with less" story is oppressive, not inspiring. The most marketable talent will leave first.

EMC CEO and chairman Joe Tucci
An employee's advice to senior management:

Senior management needs to respect its employees, listen to feedback and not bury its head in the sand as it relates to issues of sexism and lack of diversity. The culture continues to be predominantly young white men and this is largely because people hire who they know. "Breaking the glass ceiling" requires a lot of sacrifice! They will cite a few examples of high profile women, but these are the exception, not the rule. Work/life balance is not a priority in this company. Most of the highest ranking professional women in this organization are unmarried or do not have children. They need to recognize the need for more flexible work options that promote the importance of family. And most importantly, there need to be consequences for illegal and unethical behavior, regardless of who commits it! People cannot be protected from this. There are too many blind eyes turned when sexual harassment, illegal business practices, or other unethical acts occur.

Yahoo CEO Jerry Yang

An employee's advice to senior management:

Be more open to the workforce opinions. Be more humble. Be less political. Listen more, do more, and quickly.

eBay CEO John Donahoe
An employee's advice to senior management:

Streamline the process so people can focus more on getting their work done. Share more of the details of the vision for eBay and the competition of eBay.

Symantec CEO John Thompson
An employee's advice to senior management:

Open your eyes to how the actually successful companies are doing it. Use your talent pool and clear the way to innovate internally. Shift the focus from salesmanship to inherent quality. Build products that sell themselves rather than needing an aggresive sales cycle to move.

Hewlett-Packard chairman, president and CEO Mark Hurd
An employee's advice to senior management:

Stop screwing the employees. Stop reducing benefits every week. Stop saying you plan to invest in research and development when you are actually reducing everything except your bonuses. Start treating people as people. Get some moral fiber.

EDS chairman, president and CEO Ron Rittenmeyer
An employee's advice to senior management:

As I said above, either learn to trust the junior leadership you put into place or replace them. Set goals and then GET OUT OF THE WAY and allow the leadership the flexibility to execute to them. If they don't perform, release them. The micromanagement culture has to stop.

IBM chairman, president and CEO Sam Palmisano
An employee's advice to senior management:

One thing is missing though, an acceptance of the fact that there are "superstars" in the world, and that these superstars perform several orders of magnitude better than regular employees. What is missing within IBM is the ability to seek out, and nourish these superstars. Over time superstars will leave IBM because they will get much more recognition in other organizations. This has an impact on IBM's ability to deliver some things.

Microsoft CEO Steve Ballmer
An employee's advice to senior management:

There is a severe lack of leadership in the company. With so many things going on it takes executives too long to commit to business decisions and too long to pick up on competitive responses to disruptive technologies.Microsoft promotes based on 2 facets - technical knowledge and political saavy. What Microsoft does not promote based on is leadership ability, managerial ability or business saavy.

(Photo of Ballmer by AP/Sarbach)

When I joined the board, the company was spending $5 billion a year on R&D and the board was oblivious. So we established this committee. It met the day before the board meetings and got into the strategic aspect of HP. Made it possible for Carly [Fiorina] and Mark [Hurd] to take risks. HP had had a very liberal technology licensing policy, actually paying out $100 million a year in royalties. At the first meeting of the technology committee we changed that. I insisted that every single license had to be signed by Fiorina. The second thing we did was get serious against Dell Direct. But the most important thing was we encouraged the company to redirect a lot of purchases of microprocessors to AMD from Intel.

• "I do not know exactly how long"
• "I did not attend the entire meeting"
• "I do not have any reason to believe"
• "I do not know"
• "I cannot say"
• "at some meeting someone mentioned"
• "I would like to make clear that I am not certain"
• "I do not specifically remember"
• "Not that I recall."
• "Not that I recall."
• "Not that I recall."
• "In retrospect, I wish that I had been more focused"

• "I do not remember the exact words used and do not recall any discussion"
• "Not that I recall."
• "Not that I recall."
• "I cannot provide any further explanation"
• "I did not have any specific understanding"
• "I did not give any further thought to the issue"
• "I cannot say"
• "I do not recall"
• "I did not think"
• Part 10, subpart (c): "I did not have an understanding one way or the other"
• "See answer to subpart (c)."
• "Not that I recall."
• "I am not aware"
• "I cannot say without speculating"
• "I do not recall"
• "Not that I recall."
• "I do not recall"
• "No."
• "I learned only after the conclusion"
• "I do not recall exactly when I learned that fact or how I learned it"
• "I do not remember asking how phone records for my HP-owned phone were obtained."

Earlier: HP's Hurd heard nothing, nothing! [Valleywag; photo by Getty Images]

Let's play the HP $10,000 Pyramid...

Q. 'I do not know.' 'Not that I recall.' 'I can't say.'

A. Things Hewlett-Packard CEO Mark 'We can win the [post-9/11] information war' Hurd said when asked by Congress to supply more information in writing about HP's spying campaign against journalists and company directors!

Hurd - who once provided data warehousing expertise to six of the top nine communications companies - also tap danced around his earlier stated belief in the existence of a mythical view-anyone's-private-phone-records website in his written responses (PDF, WSJ account needed).

[Photo licensed from Getty Images]

Mark Hurd. Does anyone there have his email address. I have issues I would love to say I emailed to him without any regard which we all know is exactly who he is as is all that work for his company. As we know, the attitude of a company filters from the top...

So you want to e-mail the CEO-chairman of Hewlett-Packard? Elite, as with all questions of etiquette, this is best answered by putting yourself in the other person's position. Mark Hurd doubtlessly gets plenty of e-mail each day, and more than enough inquiries from an aggressive press.

Furthermore, e-mailing just so you can be rejected puts you in kind of a spot. If Hurd doesn't respond, you still look like a dick — and if he does, well, now you're a real bad guy. If Hurd is able to fend off Congress and the press, he could take you out over e-mail with half his keyboard tied behind his back.

Now, some execs are famously approachable. Marissa Mayer's e-mail is just Marissa at Google. The friendly Google VP tries to respond to every e-mail she gets. Still, I'd bet the open-minded e-mails get a much better response than flames.

But in general, look at it this way: You know how stupid your family looks when they say "You work with computers! Can you fix my e-mail?" That's how you'll look when you approach a company head trying to attack them about your "issues."

HP CEO/Chairman Mark Hurd has gone back to his NCR roots, tapping fired NCR Corporate Counsel Jon Hoak to play Chief Ethics Officer Batman to HP's we-don't-need-no-stinking-penalties Chief Privacy Officer Robin. Sure, Hoak was involved with a regrettable NCR town-poisoning incident (or two), but he reportedly did a bang-up job of investigating NCR workers who slashed Hurd's tires after Hurd slashed their jobs. And the latest issue of The Mulligan (pdf) reports that Hoak is still calling the shots as Chairman of the NCR Country Club, where denim is a crime and execs cough up a $20,000 initiation fee and $5,000+ annually to play golf.

"We are putting into place new measures to maintain the highest level of information privacy. Let me elaborate...We are also formally incorporating our Chief Privacy Officer in review processes related to HP's accountability in the collection and use of sensitive information..."

—HP CEO/Chairman Mark Hurd on HP privacy intrusion. Written Congressional Testimony [PDF]. September 28, 2006.

"Certainly companies need to be held accountable, but penalties are not necessarily the right answer. I'm not prepared to comment on penalties."

—HP Chief Privacy Officer Scott Taylor on proposed federal laws calling for fines and jail terms for privacy intrusion. CIO Insight. September 5, 2006.

By Theo DP

• Hewlett-Packard's chief in-house lawyer, Ann Baskins, resigned and won't appear in today's Congressional hearing. Her lawyer says Baskins always thought the investigation of HP board members and outside reporters was legal. [NY Times]
• Chairwoman Patricia Dunn yesterday repeated her claim that no one told her these investigations could be illegal. She also says she didn't hire the investigators who impersonated people to get their private phone records; they already worked for HP when she ordered the investigation. Because that...makes...such...a...difference. [NY Times]
• HP stock is up as investors admire how CEO and now-chairman Mark Hurd is handling the situation, as well as the actual company, which is making major bank since he took the helm in 2005. [Wall Street Journal]
• Business blog DealBreaker, which is holding a Pat Dunn Sympathy Watch, promises to cover today's Congressional hearings, which should include testimony from Dunn and from the investigators. Sez DealBreaker, "Expect some tough questions...like: so you thought stealing the phone records of your board members was legal?" [DealBreaker]

H-P is now charting the right course, with Mark Hurd firmly at the helm. There is no better indication of his commitment to doing the right thing than the appointment of Bart Schwartz as counsel to review and revamp H-P's security processes. "Bart is an outstanding lawyer and investigator with excellent judgment and immense integrity," former FBI director Louie Freeh told me. "He will act independently and provide to H-P a 'best practices' architecture for investigations and procedures which is thorough, fair and sensitive to privacy requirements."

The lawyer, Viet D. Dinh, says Hurd's role in the scandal was mitigated, HP lawyer Larry Sonsini acted ethically in the protection of his client (though others accuse him of knowingly green-lighting an illegal investigation), and reveals that Perkins sent Hurd an e-mail blaming now-ex-chairwoman Patricia Dunn for the whole thing and fearing that she'd pack the board with supporters when he left. Looks like Dinh agrees with everyone else's take: Dunn's the bad guy, and as her replacement, Hurd can save HP.

Dunn and Dusted [Wall Street Journal, sub required]

At Hewlett-Packard, a Chief Wounded by Divided Attention [NY Times]
Earlier: Mark Hurd too busy running company to run company [Valleywag]

At least twice when he had the opportunity — at meetings in July 2005 and in March 2006 — Mr. Hurd failed to ask critical questions about the methods in the leak investigation.

But some people close to him suggest — though they do not know for certain — that he failed to focus on the leak investigation partly because he was focused on getting the company fixed and partly because he regarded the search as the project of Patricia C. Dunn, the chairwoman.

At Hewlett-Packard, a Chief Wounded by Divided Attention [NY Times]

• CEO and now-chairman Mark Hurd (pictured here in his "Dad will make it all okay" glasses) will internally investigate HP's shady investigation, distancing himself from the scandal that got his predecessor kicked out.
• He'll also appear before a hearing of the House Energy and Commerce Committee, which "invited" him but was just given the right to subpoena if necessary.
• Dunn will appear before the same committee.
• HP stock could continue to recover, as it already has since Hurd announced Dunn's resignation.
• California Attorney General Bill Lockyer will continue investigating who broke the law when hired investigators impersonated phone customers to get their records.
• HP will find a different outside counsel for that investigation. News source Cal Law reports that HP fired Wilson Sonsini, law firm of Silicon Valley power lawyer Larry Sonsini, from this case while retaining it for other work.

HP chair Dunn resigns [Mercury News]
Hewlett Chairwoman Dunn Resigns [AP at New York Times]

Now Hurd needs to fend off accusations of his own involvement. So far, all that's been implied by public evidence is that Hurd knew some of what Dunn was doing, not that he was actually involved.

Hewlett Chairwoman Dunn Resigns [New York Times]

"People go by the cockroach theory: When there is one roach, there's going to be more."

HP bought the slogan and is already building an ad campaign around it.

Focus is on Hurd as HP stock price reacts to troubles [SF Chronicle]

HP CEO Allowed 'Sting' of Reporter [Washington Post]

Hewlett-Packard Co. chief executive Mark V. Hurd approved an elaborate "sting" operation on a reporter in February in an attempt to plug leaks to the media, according to an e-mail message sent by HP Chairman Patricia C. Dunn.

BusinessWeek (Tuesday):

Chairwoman Patricia Dunn and the company's general counsel [Larry Sonsini] have agreed to testify next week before a House panel investigating the affair.

SF Chronicle:

The House Energy and Commerce Committee on Wednesday gave the chairman of its oversight and investigations subcommittee the power to issue subpoenas in connection with the HP hearing.

And:

On Wednesday, the New York Times reported that HP's investigative team even considered infiltrating the newsrooms of Cnet and the Wall Street Journal by deploying investigators posing as clerical employees and cleaning crews.

Right, so now Hurd, the last good guy left in charge at HP and the board chairman-to-be, is implicated in the scandal that forced his predecessor Dunn to resign. We'll see what he has to say tomorrow in an HP press conference.

HP CEO Allowed 'Sting' of Reporter [Washington Post]
Hewlett-Packard to hold press conference [BusinessWeek]