John Paczkowski

Recent Posts by John Paczkowski

Ousted Acer CEO Gianfranco Lanci Cleaned Up on His Way Out

Acer’s leadership shake-up last year cost the company dearly — its status as the world’s second-biggest PC company, a potentially strong position in tablet and smartphone markets and a behemoth severance package paid to the guy who’s arguably responsible for losing them both.

According to Acer’s 2011 annual report, the company gave former CEO Gianfranco Lanci a separation package worth $42.9 million, following his ouster in March of last year.

That’s an outrageously high sum and, as best I can tell, a record for the PC industry. To put it in perspective, consider this: Former Hewlett-Packard CEO Carly Fiorina was branded a symbol of corporate excess when she departed the company with a $21 million severance package. That’s half the sum paid to Lanci.

How was Lanci able to walk away with such a massive payment? He negotiated a hell of a contract, and convinced Acer to sign off on it. Buttonholed at Acer’s recent shareholder meeting, Chairman and CEO J.T. Wang said the company had no choice but to pay it. “We paid the amount in accordance with international practices and the terms of his employment contract,” Wang said. “The numbers were indeed high, but that was because our board of directors hoped to settle the issue quickly by that time to avoid further turbulence in the company.”

Understandable given the circumstances, but still, $42.9 million? To the guy who so grievously misjudged the impact that tablets would have on the company’s core business? To the guy who presided over the decline in Acer’s PC market share? Who was at least partially responsible for inventory “abnormalities” that forced the company to take a one-time $150 million write-off? The same guy Acer is now suing for violating his non-compete and taking a job with rival Lenovo.

But, of course, Acer had signed the contract. Not that it will ever sign one with such a massive separation clause again. After handing Lanci his lavish severance package, Acer’s board promptly formed an executive compensation committee and drew up some pay guidelines that “not only strengthen the linkages between executives’ remuneration and corporate long-term performance, but also reduce the risks that may arise from remuneration.”

Acer did not respond to a request for comment.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik