Obama Plans, Republicans Laugh; Lululemon Not Sour that Chip Wilson’s Out; Meg Whitman’s Salary Goes Up While HP Headcount Goes Down

Dude, where’s my iPad?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Obama may not be getting his complimentary iPad any time soon. Plans for his ambitious $4 trillion budget have been unveiled, much to the chagrin of everyone, but especially the tech titans of Silicon Valley. Obama’s plan, he says, is “designed to bring middle class economics into the 21st century.” Aw. Sweet. But to do that, Obama’s plan requires higher taxes on the wealthy, but hey, screw the wealthy, right? This $4 trillion plan calls for all sorts of nifty tax credits and education initiatives, child care, paid leave, and even a $478 billion public works program. Why, even the Pentagon gets about $534 billion. This pricey little plan would also smack a one-time 14% tax on off-shore earnings in addition to a 19% tax on future off shore corporate earnings. So where does Silicon Valley come in? Some of the money Obama would like to use to finance his little project would come from his tech friends and their overseas earnings. About $2 trillion in foreign earnings are currently wafting happily along all over the world, carefully avoiding Uncle Sam’s coffers and the President’s eager to get his claws on them through these taxes. Companies like Apple, Google, Microsoft and Pfizer would lose a bunch cash – in some cases roughly $10 billion – if Obama gets his way.  But he probably won’t because Republicans are not down with his plan, and since they control the House and the Senate, it’s safe to say they’ll do their very best from letting it become reality.

Lemonade…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Alas, the unfiltered founder of Lululemon Athletica, Chip Wilson, has finally thrown in his see-through Yoga towel and resigned as board member of the apparel company, much to the delight of…well…probably everyone. Perhaps it was the lasting effects of his unappreciated comments about how Lululemon Athletica’s apparel was not suited for women who had a little more…shall we say, bass. Perhaps it was the ongoing jokes about the accidental see-through yoga pants, (again, blaming a more full-figured clientele) and other design flaws in the pricey yoga wear that finally did him in. Or perhaps it is true that the man who founded the brand back in 1998, and saw it grow into over 250 stores all over the world, really is stepping down so that he can devote more time to the new luxury line he founded, Kit & Ace. Wilson won’t be completely out of the picture as he still owns 7.8% of the company with about a $650 million value attached to that. Now if he could just learn to think before he speaks…

What’s in a number?

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Just because 15,500 Hewlett-Packard employees lost their jobs this past year does not mean that Chairman and CEO Meg Whitman shouldn’t get an 11% compensation raise. I mean helloooo? The fact that HP’s earnings and revenues are also down, compared with last year’s numbers, should also have no bearing on Meg Whitman’s pay going up from $17.6 million to $19.6 million. Of course, that pay includes her salary, stock options and other benefits – hmm, I’m sensing a private jet and maybe even health insurance. Those 15,500 people really needed to go if HP’s much-touted five-year “turn-around plan” is going to work. Part of that turn-around will split HP into two separate publicly traded companies, HP Enterprise and HP Inc. Thankfully, Whitman’s paycheck was not affected by this “turn-around plan.” Phew. To be fair, Ms. Whitman only received a measly one dollar salary back in 2012 – and over fifteen million measly dollars in compensation, as well. The board over at HP feels her efforts are, in fact, paying off and she deserves all that (and more), especially when you consider that HP stock is up around 38% this year.

The GameStop’s Here, Uber Excitement and HP Is Shrinking

Dropping Up…

Image courtesy of Idea go/FreeDigitalPhotos.net

Image courtesy of Idea go/FreeDigitalPhotos.net

There’s nothing like a price drop to get consumers to open up their wallets a little quicker. Microsoft may not be all that thrilled to have dropped the price for its Xbox One, but a move like that sure has a way of creating greater demand for the product. But the real winner here is GameStop (GME). Greater demand for the hardware creates greater demand for  the software. Good thing GameStop supplies both. Isn’t that convenient. Revenue for the quarter ending May 3 was $2 billion with a hefty $68 million profit.  Other companies digging the price drop are Take Two and Ubisoft, makers of the highly educational and extremely informative video games, Assassin’s Creed and Grand Theft Auto.

Uber-drama…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Uber, the uber-cool ride sharing app is making some tracks today. It’s looking to score $500 million for its latest funding round which could drive its value up to $12 billion. Not bad for an app that’s practically its own middleman. Of course, not everybody is impressed or excited by the technology and they are going to do whatever it takes to make sure Uber knows that. Boston cabbies are part of the opposition as are taxi drivers in Miami. Across the pond Brussels isn’t pleased either. But it’s London’s black-taxi drivers that are taking their dissatisfaction to a whole new level, apparently staging a massive protest. It should be duly noted that these same London drivers already showed their lack of enthusiasm to Uber’s competition, Hailo, by very impolitely (and presumably illegally) vandalizing its offices. But Uber CEO Travis Kalanick is probably thinking more about the $20 million in gross revenue his company pulls in every week.

Crickets crickets crickets…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

It’s going to get awfully quiet at HP (HP). Really really quiet. But not because they’re encouraging napping at work like some of those other (cool) companies. And if you sent your resume there, don’t expect a response. CEO Meg Whitman announced, as part of her five year turn around plan, that she will be cutting even more jobs than what she previously decided to cut. A whole lot more. Between 11,000 and 16,000  employees will be asked to leave their staplers at their desks. Bringing the grand total to about 50,000 people who will be spending their new found free time trolling job boards. The 75 year old, Palo Alto based company is losing ground to smart phones and cloud computing and as a result their pc and printers divisions have been taking regular fiscal punches. In fact they have been getting hit for three years running. Here’s hoping its remaining 317,500 employees can help avoid that in the future.

Check This List, Toning Up and Pandora Rocks?

What’s the value of values?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

You can feel a whole lot better next time you chow down your Fruit Loops knowing that Kellogg Co. was voted one of the world’s most ethical companies. I swear I did not make this up. The Ethisphere Institute is an independant research institute that promotes and recognizes business ethics. “Companies that truly go beyond making statements about doing business ethically and translate those words into action,” according to a statement by Ethisphere, make it onto the list.  This is Kellogg’s sixth time on it. So break out a Pop Tart and celebrate. Some of the other companies that made the list include Google, Petco and Gap Inc. Now if they could only do something about those used car salespeople…

That’s printastic…

Image courtesy of frankie_8/FreeDigitalPhotos.net

Image courtesy of frankie_8/FreeDigitalPhotos.net

At its annual shareholders meeting, HP CEO Meg Whitman said it’s “like watching ice melt.” Obviously, she was discussing the current batch of 3D printers that could and should be doing oh so much more. Good thing Ms. Whitman thinks she, and HP, of course, have found the solution. Unfortunately that solution won’t be presented until June. Rumor has it, though that HP plans to speed up the printing and improve the quality. To be competitive they will have to price the printers at the $5000 point. That’s great news – as long as your employer is footing the bill.

Not exactly music to your ears…

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

If you’re still on the fence about getting that Pandora subscription now would be a really good time to make that decision. A federal judge just ruled that the streaming music service should be subject to a higher royalty rate than radio stations. Pandora One, the premium service from the music streamer, Pandora, is about to raise its price. They’re also scrapping their yearly subscription model. If you are already a subscriber, the price stays at $3.99. For now. Otherwise, procrastinators can expect to fork over another buck for the premium ad-free service. The new rate takes effect in May. Or you could just listen to your favorite music and your not so favorite ads for free.