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The Worst VP of HR in the World? Fortune Reports, You Decide...

Let me state from the start that I don't know this person.  I'm simply going to use excerpts from Fortune give you some cliff notes on HR pros behaving badly.  It's not often that the majority of an major business magazine article is focused on the destruction and ill will caused by a wayward HR Pro.  More from the Fortune magazine article on the fall of Pfizer CEO Jeff Kinder, go read the whole thing for a good business story:

"Perhaps the only thing as destructive to Kindler as his inability to trust his colleagues was the one Hologram_starwars Pfizer executive in whom he did place his trust: Mary McLeod. The head of human resources under Kindler, McLeod would leverage her relationship to the CEO to become both his emissary and a power in her own right. Kindler's loyalty to her would undercut him at a crucial moment. McLeod, 51 when she joined Pfizer, had an unusual career trajectory. She had started as a dental hygienist before going back to school and pursuing a career in human resources. She had worked with GE Capital, Cisco (CSCO), and Charles Schwab (SCHW). She was a no-nonsense type who seemed to relish difficult environments.

(My notes appear like this.  So far so good.  Up from the ranks, loves tough environments...)

Her tenure at Schwab had ended disastrously, though there's no sign Kindler knew that when he brought McLeod in. As Schwab's head of HR and chief of staff to CEO David Pottruck in the early 2000s, McLeod had proved toxic, according to six members of Pottruck's executive team. They say she isolated him from other points of view and went to extraordinary lengths to remove rivals. Meanwhile she criticized him behind his back and bragged that she had the CEO under her thumb.

(OK and preferred to have your CEO's back - but you can't have it both ways.  You can't be close and then talk smack about him to others)

After an internal investigation, Pottruck fired McLeod in 2004, he confirms. In an e-mail sent to McLeod the day of her termination, read aloud to Fortune, Pottruck wrote: "The issues are about the perceptions others have of you around character, integrity and divisiveness … There is a perception that you do not tell the truth."

(Um..Yeah... His investigation turned up six stories of the HR head talking smack about him behind his back.  That's called "for cause" and "with malice" when you get fired by your CEO).

Nine days later, Pottruck himself was gone, forced out by the board over strategic differences. The McLeod situation, says one executive, "affected his credibility dramatically." Says Pottruck, who still sounds stung years later: "Why purposely undermine me and our entire team? Mary's behavior and motivations are hard to understand, even to this day." McLeod says Fortune'saccount of her time at Schwab is "false" but declines to offer any specifics, noting that she is bound by a confidentiality agreement with the company.

(The firing came too late.  He was already damaged goods with the rest of the senior team, and odds are, it had made its way all the way to the board.  You have to wonder what was different about the reports to Pottruck that made him pull the trigger and do the investigation - a board member probably told him about the rumors, at which point he believed it)

McLeod managed to rebound from her firing and make her way back up the corporate ladder. By the time she became Pfizer's HR chief in early 2007, the company was preparing for wholesale layoffs. McLeod's job was critical.

Although she moved rapidly to shrink the bloated HR group, McLeod seemed uninterested in the details of how the streamlined department would actually function. Even top deputies say she was virtually unapproachable, preferring to communicate by e-mail and quarterly videocast.

(Videocast to the field HR team!  Nice!  It would have been really cool if she could have got a personal hologram ala Star Wars)

McLeod's primary focus was the care and feeding of the CEO. She became Kindler's protector and surrogate, whispering in his ear, controlling access to him, delivering his blunt messages. Kindler admiringly called her "Neutron Mary," after his hero, Jack Welch. McLeod seemed to encourage his harshest nature, telling him, according to a person who was present, that one senior executive was "a B player," another too ambitious, someone else a "crybaby."

(I'm guessing the reference check didn't happen in this case.  3rd party search and everyone assumes someone else ran the background check and called Pottruck?  Only the shadow knows)

McLeod also publicly denigrated her employees, announcing at one town hall meeting in 2008 that two big positions would have to be filled from outside because no one inside Pfizer was capable of doing the job. Another episode, in which one of McLeod's lieutenants unsuccessfully attempted to make an outside consultant turn over so-called 360° reviews of Pfizer's top brass -- which were intended only for the executives' personal development, not to assess performance -- fed paranoia in the senior ranks. Says a former Pfizer HR exec: "There were a lot of comments to the effect of 'What is Jeff thinking?' Everybody questioned his judgment." (McLeod would not discuss any events at Pfizer, citing a confidentiality agreement with the drug company.)

(360 degree review in the secret closet!  Must... use...power...for bad good)

Even as McLeod alienated staffers with her behavior, she was attracting notice for her perks. McLeod had negotiated a special deal, personally approved by Kindler and later ratified by the Pfizer board. First, she received a $125,000 cost-of-living adjustment to compensate for moving to the New York area from her home in Delaware (while getting another $238,000 to cover a loss on the sale of a second home she owned on Long Island).

But McLeod didn't move -- at least not anytime soon. Instead, she began traveling back and forth regularly on a company helicopter from Delaware to Manhattan. Under Pfizer policy, top executives such as McLeod were entitled to business travel on company aircraft and 20 hours of free personal use each year of both jets and helicopters. But McLeod's employment agreement, signed by Kindler, was more generous. It allowed her to commute on a "weekend" basis between Delaware and Manhattan for a three-month period starting in April 2007. When McLeod failed to move to New York during that period, Kindler extended the deal through the end of 2007. Ultimately, even after buying a house in New Jersey, she continued using company helicopters for business travel into and out of Delaware until she left the company.

(HR Directors in the field:  Stop whining that you can't use Marketing's souped up Prius.  It's obvioius from this account you can't handle the responsibility)

Apart from the terrible impression conveyed by an HR chief choppering to work in the midst of massive layoffs, someone soon realized that this arrangement posed another problem: McLeod's emoluments were so lavish they might make her one of the company's five most compensated employees, which would require Pfizer to disclose the details in its annual proxy statement. In early 2008 company governance chief Peggy Foran investigated the issue and tallied nearly $1 million in payments to McLeod, including those relating to her various houses, the helicopter use, and a large bonus to buy her out of a consulting partnership. Then there was McLeod's salary and regular bonus of $900,000 and restricted stock and options.

The prospect of revealing those details was disturbing for the board, which had been pilloried for McKinnell's severance package. Foran and Kindler were called before an executive session to discuss the aviation policy. The compensation committee reviewed McLeod's package in detail before ratifying Kindler's approval of exceptions to Pfizer's compensation policies. Ultimately Pfizer concluded that it did not need to disclose McLeod's pay.

Still, rumors of McLeod's perks spread around the company. Word also leaked to Pharmalot, an industry blog, and a cartoon circulated on the web showing a sinking Pfizer ocean liner and a helicopter hovering overhead. Asks the pilot: "Ms. McLeod, are you ready to head home?"

(Yes, that's true.  The board realizes things must be out of whack when they almost have to report her as one of the five earners in the company per SEC regulations.  No truth to the rumor that she was behind the scenes negotiating for the GOP in the 2011 Debt Ceiling crisis.  She's good, but probably too pricey for K street)

And I'm out...

Comments

Neuromancer

mm and I thought *&^% $%^&!"£$ at British Telecom was bad.(asked to leave because of sexual harassment)

Joel Kimball

Damn, she's smooth. OK, not so much. Wow.

Michael Brisciana

Kris - - -

Loved your perspective on what is truly an INCREDIBLE (horrifying, appalling, remarkable, etc.) story. A few thoughts to share:

1. It continually amazes me how, once someone gets to a certain level, even out-and-out failures (firings) don't stop their upward progress -- i.e., the next job they get is as big or bigger than the one they were fired from. There's something there about "spinning a tale" about yourself, I'm sure (self-deceptive though it may be). Amazing.

2. Regarding her compensation and perks, it almost seems like the more outrageous the demands, the more likely they were to be approved. I'm not sure exactly what the "lesson" is in this -- other than a VERY SCARY one (particularly re: the failure of the board to reign her in).

3. They say "pride comes before the fall." Thankfully, the madness was brought to a close in this case. It's just sad that it took so long.

Thanks for a great take on a fascinating story.

Michael Brisciana

Jeannie

Great story. One thing, though: The Debt Ceiling crisis is not owned by the GOP.

KD

Hey Jeannie -

I didn't mean that the GOP owned the Debt Crisis, just that they were pretty damned powerful in the negotiation of the deal... hard negotiators....

Thanks - KD

Mitchsullivan

What this story ultimately illustrates (and answers Michael's question about incompetence not getting in the way of ambition) is that networking works.

John R Petrov

Very good article. The tough part is when the bad boss is the top HR executive. They seem to have a way of spinning things to hold on for their life as long as possible all while creating chaos in the organizations they are responsible for protecting and serving.

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