The World’s Most Disgusting HR Leader…And What I’ve Learned From Her!
by Alan Collins
This is the story of a truly horrible HR leader.
This scumbag’s name is Mary McLeod.
You may have heard of her. She’s the former Chief HR Officer at Schwab and Pfizer.
What you’re about to read are excerpts about her days as the head of HR, which were drawn from this article about Pfizer CEO Jeff Kinder that appeared in Fortune a few months back.
Now, I don’t know her personally. But I’ve learned a lot from her exploits.
Here’s her story (along with my take on it).
Mary McLeod began her career in HR at GE Capital and Cisco. While there, she quickly built a reputation as a no-nonsense HR-type who relished working in tough environments.
She then moved on to Schwab, where she was appointed SVP of HR.
As Schwab’s top HR officer, she built a reputation as “toxic.”
And her time in this job ended disastrously.
Why?
Well, according to Fortune, she promoted divisiveness among executives, isolated the CEO from other points of view, went to extraordinary lengths to alienate and remove her rivals on the leadership team and fed gossip around the organization that every HR tries every day to avoid.
If that wasn’t bad enough, she criticized the CEO behind his back and bragged that she had him “under her thumb.”
When the Schwab CEO found out about this, he investigated and then terminated her in 2004. In an e-mail sent to Mary the day of her termination, read aloud to Fortune, the CEO, David Pottruck, wrote about her: “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.”
Here’s what happened nine days later…
the CEO who fired Mary
…himself was fired!
That’s right.
Officially, he was forced out by the Board over “strategic differences.”
Unofficially, however, his hiring and handling of Mary McLeod, says one executive, “significantly contributed to his termination and affected his credibility dramatically.”
Said Pottruck, the fired CEO, who still sounds stung years later: “Why purposely undermine me and our entire team? Mary McLeod’s behavior and motivations are hard to understand, even to this day.”
(Note: McLeod says Fortune’s account 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.)
Yeah, right.
Sadly, it doesn’t end here.
Mary wasn’t finished.
She managed to rebound from her firing and made her way back up the corporate ladder.
This time she, at age 51, became Pfizer’s HR chief in early 2007. And, at that time she joined the company, Pfizer as preparing to go through a big downsizing with wholesale layoffs.
The number of people that were ultimately let go would total close to 10,000. So her job as the head of HR was absolutely, positive crucial.
To support the company efforts, she moved rapidly to cut her own bloated team in Human Resources.
(Ok, not a bad move. No reason why HR should be exempt from these massive reductions too).
However, according to accounts in Fortune, once her deed was done in HR, she seemed uninterested in the details of how the streamlined Human Resources organization would actually function. Even her top deputies in HR say she was virtually unapproachable, preferring instead to communicate by e-mail, voicemail and quarterly videocast.
How did she spend her time?
You guessed it.
Her primary focus was the care and feeding of the CEO, Jeff Kindler. She became Kindler’s protector and surrogate, whispering in his ear, controlling access to him, delivering his blunt messages.
In part because of this, Kindler admiringly gave her the name “Neutron Mary,” after his hero, Jack Welch. Neutron Mary 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.”
Neutron Mary also publicly denigrated her employees, announcing arrogantly 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.
In another episode, one of Mary’s HR lieutenants unsuccessfully attempted to make an outside consultant turn over 360° reviews of Pfizer’s top brass — which she initially said were confidential, only intended for personal development…not to assess performance. This unexpected flip-flop created paranoia in the senior ranks. (Note: McLeod would not discuss any events at Pfizer, citing a confidentiality agreement with the drug company.)
Even as Mary alienated staffers with her untrustworthy behavior, she was attracting notice for her perks. Mary had negotiated a special deal, personally approved by the CEO 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).
(Now, again there’s nothing on the surface wrong with this.)
Except one thing.
Mary 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 her were entitled to business travel on company aircraft and 20 hours of free personal use each year of both jets and helicopters.
But Neutron Mary’s employment agreement, signed by the CEO, was even 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, her CEO 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!
(Rhetorical question: What kind of impression do you think was conveyed by the top HR leader choppering to work while 10,000 people are losing their jobs? Can you spell: “Let’s Occupy Pfizer!”)
Anyway, if that wasn’t bad enough, someone soon realized that this arrangement posed another problem: Neutron Mary’s perks 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.
So, the company investigated the issue and found they had tallied nearly $1 million in payments to her, 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 Neutron’s Mary’s salary and regular bonus of $900,000 and restricted stock and options.
The prospect of revealing those details was disturbing for the Pfizer board, which had been raked across the coals for other lavish executive compensation packages. The compensation committee reviewed McLeod’s package in detail before ratifying CEO’s approval of exceptions to Pfizer’s compensation policies. Ultimately, they concluded that it did not need to disclose McLeod’s pay.
However, rumors of McLeod’s perks spread around the company.
(Now, did these idiots really think this stuff could be kept quiet?)
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?”
All this fed the rumor mill within the company and disarray within the executive leadership team.
Mary had become toxic and feared inside Pfizer.
However, Kindler, the CEO, seemed blind to her shortcomings, opening up a divide within his executive leadership team. Said one executive: “There was Mary and the CEO, and then there was the rest of us.”
But then, on Nov. 9, something happened that amplified the growing sense of disarray at Pfizer, setting in motion the events that would lead to Kindler’s departure: Mary McLeod sent out an e-mail. She had recently received the abysmal results of a survey of her direct subordinates. More than a third of them rated her performance as a 1 or 2 out of 5 in key areas.
(These ratings seem a bit high to me…anyway…)
She reacted by writing a strange, meandering e-mail to her top staff. “I just wanted to say how sad and embarrassed I am by these results,” McLeod began. “I’m sad for all of you that you work in an environment that clearly is making you so unhappy.” One option she proposed: “I can leave the company and/or this particular job … This will allow the Jeff (the CEO) to hire someone that is more in sync with all of you and a better leader for you.” She added: “… if any one of you spent 48 hours in my job, you would understand.”
On Nov. 14, someone forwarded McLeod’s e-mail to both the CEO and the Pfizer board, with a detailed (but unsigned) cover note. While McLeod’s e-mail was itself “troubling,” the anonymous author wrote, the state of the Pfizer HR department should be “cause for serious concern … The real issue is Mary’s leadership. She has very little interest in the HR function itself, offers little guidance and focuses mainly on the CEO and his needs.”
The writer urged a thorough investigation, conducted by someone independent because McLeod’s deputies feared retaliation.
The letter was discussed at a Board call. Given the retaliation assertion, the Board wanted to name an independent outside investigator. The CEO defended McLeod, praising her for connecting HR to the company’s businesses instead of focusing on “touchy-feely” stuff.
But the CEO went along with the Board’s recommendation.
The two-week investigation was conducted by Gordon & Reindel, consultants who specialize in corporate governance work, and involved interviewing all of McLeod’s direct reports. They found nothing illegal, but concluded that HR was “thoroughly dysfunctional, and driven by inept management.” In their view, this was a simple case of incompetence.
On Wednesday, Dec. 1, Pfizer’s executive team gathered for a day of meetings with the CEO. Mary McLeod was missing. After hearing the consultants’ report, the CEO had finally parted ways with his controversial HR chief — though not without a generous severance package.
But that’s not all.
Now it was the CEO’s job in jeopardy.
The problems with Pfizer’s HR chief had sharpened the Board’s concern about its CEO.
- Why had Kindler defended Mary?
- How could he be so blind to all the trouble that she was causing?
- How could he have failed to acknowledge her manipulative and organization-destructing influence on the company?
By the time she was fired, the Board couldn’t help but think that it was too late. The damage had been done.
So, just as had happened at Schwab, Mary McLeod’s issues had morphed into a crisis for her boss.
The next morning, Sunday, Dec. 5, 2010, the CEO, Jeff Kindler and Pfizer quickly agreed on a generous exit package. “They just felt he was no longer capable of leading the company.”
End of story.
For now.
Here’s my take on all this:
This is the kind of HR leader gives our profession a bad name. Like in any walk of life, HR has its share of bad apples. However, as HR, that’s no excuse. I believe our ethical standards MUST be higher than ANY other corporate function.
Though HR is often under-estimated, we have a significant amount of power and influence…
- A bad HR leader can create the type of havoc with in an organization that no other function can.
- HR can divide (rather than unite) the people in an organization in ways that no other function can.
- HR is capable of setting a toxic tone that alienates people within the business and the performance of the business in ways that no other function can.
And, as the conscience and soul of the organization, we can’t permit this happen.
That’s what I’ve learned from Neutron Mary.
What are your thoughts? Please share them HERE.
About the author: Alan Collins is Founder of Success in HR. He was Vice President – Human Resources at PepsiCo where he led HR initiatives for their Quaker Oats, Gatorade and Tropicana businesses. He is author of the HR best seller, UNWRITTEN HR RULES . His new book, BEST KEPT HR SECRETS is now available on Amazon.
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Hi Alan ! A great case study, a masterpiece of learning, and an eye-opener ! I endorse your take, absolutely. HR have a sacred role to perform, in the sense that, they are the conscience-keepers of an organisation, and the supreme custodian of the interests of the organisation. HR must lead by an example. Alan, do you know your articles are treasured by me with reverence, perused several times over. Hey, you are one of the few and finest HR professionals. Do keep up and keep in touch. My best wishes !!
Love your descriptors of HR’s role..
-Sacred role to perform
-Conscience-keepers of the organization
-Supreme custodian of the interests of the company
-Leading by example
Well said!
An excellent vignette! An example of how dysfunction in a senior leadership team impacts an entire orgnization. We went through something similar at the hospital for which I work, except the CEO and Nurse Exec were the toxic duo – HR was the main target. Fortunately it turned out okay for HR, but not without a lot of relationship damage done along the way – specifically trust among team members. The greatest asset any senior leader can possess is humility and a servant-leadership mindset. The days of “let them eat cake” are over.
So true that the HR leader sets the tone for relationships and overall levels of trust in the organization! Now here’s a quandary…if you were part of a toxic HR dept and chose to leave because of it, how would you explain that to a potential future employer? Because, we are not supposed to be negative about previous employers at all costs, right…?
Heather – in an interview, nothing changes in my view. Your job is to sell…
YOUR accomplishments
YOUR results
How YOU impacted the organization
How YOU overcame obstacles (including the “toxic” environment)
What YOU can do for the new organization
etc..
Alan,
Thank you for this article. It is truly disturbing to hear that this person had so much power. In this time of crisis, it underscores the point that we need to stick to strong values and principles in our leadership.
I am thrilled to see the phrases, “sacred role” and “conscience” emerge in this conversation. As HR leaders, we must “keep the faith” and hold to ethical standards or the culture of the organization is doomed.
Thanks to all of you for the inspiration.
Hello Alan,
This was a great read and say’s a thing or too about HR and it’s impact on the business. Your take on this is what I found interesting, it’s a universal take and can be applied to all organizations no matter how big or small they are.We should all learn it and live by it !!!
Regards
Alan,
Loved the article, while reading it I could relate many of these practices to people that I have met & worked with through my career. The case that I’m currently dealing with does nearly the same practices, but instead of the CEO, the person in charge is the owner, or as he calls himself (the Executive Partner). How do you recommend dealing with such a situation?
thanks
Mohamed
To be honest it is a bit inspiring that even HR can command power to get absolutely corrupted. That means HR is not as powerless as many other departments believe.
Mary is my role model of how NOT to do things.
Alan, Thanks for sharing that story. It is disappointing that we continue to have individuals such as this person carrying the title of Sr. VP HR, Chief HR Officer, etc. It is disappointing to learn of this story but I am not surprised.
Two things jump out at me having held similar jobs in the large pharma and a start up bio tech.
Each CEO (and every corporate officer) has their own perspective on the role of HR. Unfortunately I have worked with some who view HR as a function that “keeps them out of trouble” and “helps them deliever bad news”. Naturally, what the CEO asks of the HR executive has a lot to do with the behavior seen.
I have always felt that our role should be to advise, counsel and guide but not be a replacement for the action of a leader. Our role should be to help identify, craft and prepare a leader to choose the best course forward, not to do it for them. When we try to act on behalf of the CEO or any executive, when they should be leading, we send very confusing messages to our peer leaders who need to be able to trust our motives and have confidence in our integrity and character in our roles as advisor and internal consultant.
Secondly, unfortunately I have seen too many HR leaders who fall into the trap of trying to take care of their boss, at the expense of being an objective voice in the organization. Someone who is trusted by all colleagues.
If a person in a senior executive HR role (or any HR role for that matter) is not trustworthy and not capable of effectively advising their client and truly acting as an internal consultant rather than just puppet, I suggest they simply should not be in HR.
Sadly it is situations like this that set back the HR function. These stories make it more difficult for those HR professionals who are working hard to understand the business issues and how HR can impact the direction and critical objectives of the business.
Mike, thanks for weighing in with such terrific insight. “Doing” the business/!line leader’s job vs. being the trusted advisor, coach, guide to him/her is a GREAT point! I agree 100% that it’s a huge trap to avoid getting sucked into for HR.
-Alan
All I can say is UNBELIEVABLE! This is a classic case of Senior Management abusing their power, while everyone else suffers. HR is the most powerful deparmtent in any organization…whether you believe it or not. We have a greater responsibility of ethics, AND “doing the right thing”. This message is the only message we should be sending throughout the organization. However, a even greater injustice was done, by the CEOs of both companies to approve/allow this to go on for so long. Apparently in this case the fish truly rots from the head, as opposed to the tail (from the top down).
This was truly a disgusting display of the HR function, and in no way represents what “good HR” is all about.
Over the course of my career, I have seen the senior HR leader’s role become more and more susceptible to such behaviors. I agree passionately that we in HR must raise the bar at all times for integrity and decency.
In my own time, I have had the opportunity of meeting and working directly, as internal and/or external consultant with many top
level Executives, Managers and HR heads, “from the world class corporate companies” to the “small size local organizations”.
I have found almost all the “text book cases”, from the real nurturing
persons, hard workers: “truthful and transparent ” to the “corrupt, narrow
minded and cruel persons” and those with good intentions, “still, misguided” that even, landed in jail, as a result of their improper behavior, and that were caught with their “hands in the cookie jar”, because they thought that they had the right to do whatever they decided to do.
In short, I do agree with the excerpt from Gyu E.Mercer © :
…that comes along with being a member of the “human race”, living in a “very human world”.
…And, while embracing that reality, if we keep our search for excellence, using our own strengths, copying with our our weaknesses and being congruent with our own values, we will be able to do our part, staying at the side of the immense majority of persons that live in this world, keeping it basically good, for the
generations to come…… © 2005, 2009, 20011.
I have 2 comments:
1. I’m no means an expert in this area….I recently learned a little bit about ‘social’ bullying because I have a child in middle school. Often social bullies ‘attach’ themselves to a charismatic good person in the ‘center’ of a social circle. The bully uses rumors for example to ‘control’ the others in the social circle and the bully blinds the ‘center’ charismatic person from what’s really going on. Supposedly, this behavior sometimes continues as an adult and happens in the workplace. It could be what happened here.
2. I think this story can also happen with a non-HR exec ‘attaching’ themselves to the CEO. My question is, is it harder to ‘uncover’ or prove and fire the bully when its a non-HR exec. I also wonder if its a non-HR exec who is toxic and fired, would the CEO be scrutinized less?
Thank you for sharing this interesting real story.
Mary practices are not surprising but she was over abusing her title .
A HR Practioner or professional , HR roles and functions shall be practiced properly, ethically and fairly.
It is about being role model to all and lead as example to succeed and acheive sustainable business goals.
It is not simple job but requires high interpersonal and communication skills to manage human capital and build a team spirit and positive environment to work at.
Thank you all,
Lana El Moustrah
Yeow! Well written piece. I shuddered. Mary takes the cake but we’ve all seen people in power support roles like HR who misuse that privilege. It is a measure of the blinders on those who authorize their clout, like the CEOs mentioned. I think one of the abilities of the very best leaders is to filter through all the noise to discern patterns that matter, like the toxic impact of a trusted advisor who is abusing her power.
I’m not sure how I ended up here but what an interesting article. If I had the money I’d put this into a movie, though not have her just as the villain because I’m sure a lot of the Execs she faced are just as vile, power hungry and greedy.
Was she having relationships with the two CEOs?