It's December 1st, 1958 and everything at Hudsucker Industries is going great. Profits and the stock price have never been so high, so it is shocking when President Waring Hudsucker (Charles Durning
) runs down the table at the Board of Directors meeting and throws himself out the 45th floor window of the Hudsucker building. Despite this tragedy, vice-president Sidney J. Mussburger (Paul Newman
) quickly focuses the board on the problem that Waring's death has left them: With no designated heir his 51 percent share of stock will be sold to the public one month from that day. The board would like to buy the stock and retain control of the company, but at the current price, they cannot afford it.
Mussburger comes up with a plan to depress the stock price by temporarly putting an obviously incompetent person in the President's seat. But who can he find that is stupid enough to qualify?
Fortunately, for him, Norville Barnes (Tim Robbins
) has just arrived in town with a brand new degree from the Muncie, Indiana, School of Business. Barnes has an idea for a new product, which he shows to everybody he meets. Unfortunately it appears to only be a circle drawn on a piece of paper as Barnes has a problem explaining exactly what he has in mind.
Barnes is working in the Hudsucker mailroom the morning of Waring's death and as the new boy is given the unenviable task of taking a high-priority "Blue letter" (they are always bad news) up to Mussburger's office. Before delivering the letter Barnes first tries to show Mussburger his idea for his new product and in the process sets an important contract on fire and nearly causes Mussburger to fall out the window. In all this, however, Mussburger realizes he had found the perfect dupe to take the president's job.
With a shave and a new wardrobe Barnes is quickly installed in the president's office, separated from Mussburger's own by the works of the massive company clock. It is at this point we meet the kindly clock keeper (Bill Cobbs
) and the company repairman. They seem to represent good and evil forces in the film.
Newspaper editor (John Mahoney
) is suspicious of this move to put a novice at the helm of such a big company and dispatches prize-winning reporter Amy Archer (Jennifer Jason Leigh
) to find out what is going on. Approaching Barnes as a poor, unemployed girl from Muncie, Archer gets him to hire her as his secretary. At first she thinks him an imbecile, and writes her story like this causing the stock price to plummet just as Mussburger wants. She soon changes her mind, however, seeing him as a bright and good-hearted fellow who is just totally naive about company politics. They soon start to fall in love.
Now that he is the president, Barnes decides to have the company produce his new product. Mussburger goes along with this as he expects it to be a bust further dropping the stock price. As it turns out Barnes's idea, when actually manufactured, is the hula-hoop which soon becomes a big success and pushes Hudsucker stock prices to new heights.
Mussburger sets out to totally discredit Barnes by having elevator operator Buzz (Jim True-Frost
) claim Barnes stole the hula-hoop idea from him. He also discovers that Archer is actually the reporter that wrote the story bad-mouthing Barnes and accuses him of bad judgment in hiring her. The apparent betrayal by Archer sends Barnes into an emotional tailspin and Mussbuger has psychiatrist Dr. Hugo Bronfenbrenner (David Byrd
) declare him mentally incompetent.
Archer finds Barnes at a beatnik bar on New Years Eve and tries to apologize to him, but he leaves intending to throw himself out the window of his office. He first puts on the apron he wore in the mailroom and then climbs out on the ledge. He finds he can't do it, but slips and falls anyway. Suddenly halfway to the ground he stops as the clock keeper has wedged a broom handle into the mechanism of the company clock apparently stopping time.
While Barnes hangs in space, Waring Hudsucker visits him in the form of an angel. Waring reminds Barnes of the blue letter he never delivered which is still in his apron pocket. Barnes reads the letter which reveals that Waring, despite his apparent success, was never happy because he drove away the woman he really loved. The letter also goes on to state that the 51 percent of the shares owned by Waring will go to whoever the board selects as the next company president (who, at the time, Waring was sure would be Mussburger), so that person will be free to operate without the pressure from the stockholders. Barnes realizes this will save him, if only he can avoid falling the rest of the way to his death.
Up in the clock room a fight starts between the good clock keeper and the evil repairman. The broom is knocked out of the mechanism and Barnes starts falling again. A punch from the clock keeper, however, sends the repairman's false teeth flying into the mechanism to stop the clock again with Barnes only two feet above the ground. When it starts again he is uninjured by the short fall and races to the bar to tell Archer that he loves her.
Barnes is again in charge of the company and Mussburger, finding out that he could have had everything he wanted - the presidency and the stock - if he only hadn't been greedy, goes off the deep end and is sent off to a sanitarium. With Archer as his girl at the next board meeting Barnes introduces his next big idea for Hudsucker Industries, the Frisbee. The board applauds and the film ends.