Whitman receives $16.5 million performance-based package for 2011, one dollar salary | webOS Nation

Whitman receives $16.5 million performance-based package for 2011, one dollar salary 15

by Derek Kessler Mon, 06 Feb 2012 6:11 pm EST

HP CEO Meg Whitman isn't making out like a bandit as much as her predecessor, but she still has potential to do pretty well for herself as HP's chief executive. She agreed to a salary of one dollar a year, plus bonuses and stock options. With 2012 closed out, HP filed with the SEC their customary forms, including disclosures about how much Whitman and the rest of the executive team were compensated for their time and effort.

For her part, Whitman received her $1.00 paycheck, $372,598 in "other compensation" and stock awards worth* more than $16 million. We put an asterisk on 'worth' for a reason - they're only worth that and only available if Whitman can get HP's stock price up. The stock options are broken into two 800,000 block units, the first vesting on her one-year anniversary as HP CEO (22 September 2012) if HP's shares close above $28.31 for 20 consecutive days. The second block comes due a year later at $33.03 per share. As you can imagine, should Whitman be able to hit those marks, she'll have quite the nice payday as a result. Currently, shares of HPQ are trading around $28.76.

We've always been fans of performance-based compensation here - giving the executives a stake in the company gives them motivation to work extra hard. That said, even though they're practically an industry standard, there's something about tying that to the stock price that doesn't sit well with us. The stock price is a general summation of the company's worth, and that includes metrics like market share and profit. But the stock price is also focused almost exclusively on the short term - on the next quarter. A few good quarters can mask a lot of underlying structural problems in a company. Stock-based compensation is centered around the personal enrichment of the executive as a result of the enrichment of the company.

We suppose that's not a bad thing, so long as the deal is structured competently. What we finally got a glimpse into HP's filings is the result of a bad deal: Leo Apotheker. The ousted HP CEO's 11 month reign of terror included a much criticized $10-billion acquisition, the thought of splitting of HP's profitable PC division, and the closure of webOS hardware development. During his time at HP, Apotheker brought in $1.15 million in salary, a $4 million signing bonus, $2.4 million severance payment, $17 million in stock, $2.9 million in relocation expenses, and $1.7 million in non-competition payments (perhaps HP should have paid Apotheker to go work somewhere else). Yup, Apotheker made nearly $30 million in the course of wrecking HP and slashing its valuation by 40%. Contrast this with Whitman's compensation package and you can see that the HP Board of Directors learned its lesson the hard way.

Source: AP; Via: The Verge



Wow - $28.31 and $33.03 are pretty low expectations for this stock over the next year. I see the board doesn't think much of HP in the near term. The stock was hanging in the mid 40's before Leo opened his mouth and things seem to have settled. I would think high $30's should be a fair target and anything else is failing. This board is a complete joke.

$2.9 million in relocation expenses?!?
* Put sock #1 into box and ship FedEx next day air.
* Put sock #2 into box and ship FedEx next day air.
* Put sock #3 into box and ship FedEx next day air.
* Repeat over and over?

Or, perhaps he was using $10's and $20's as packing paper.

They made him take all of his broken promises with him. It was cheaper move those promises with his laminated furniture, than to warehouse them.

It looks as if she is crushing someones head. I wish it was Apotheker's!!!!

More like the Lord Vader crushing your wind pipe trick.

Short term stock performance incentives are almost always a bad idea and they're anathema to long term projects like giving a fledgling OS the resources and promotion it needs. Blech...

There's also that matter of earned income being taxed at 35% and capital gains being taxed at 25%.

Isn't it 15% for capital gains?

Gotta love capitalism. Isn't there a better word for all this madness, that doesn't make one sound like a homesick comunist?

The sad part about this is. I could step in as CEO and run the company just as bad as Apotheker did for half the money. I find it amazing that he, and people like him are able to move from company to company, perform poorly and be compensated with ridiculously high salaries and bonuses. I don't know about the rest of you, but if I make mistakes, my salary increase would be nothing. It may even be a resume generating event.....with no severence package. Yes...I am jealous and a bit confused.

Indeed. I wish someone would pay me like that to run their company into the ground. I'd kill two companies in two years and retire.

F-up and move up, you know. Although I am having a hard time thinking about how much further Leo will go up after effing this up so bad.

Just as a side note, since HP got Leo from the outside, they also paid a hefty finders fee to some very happy recruiter.

at a certain level they just recycle the trash. You really have to blame the dumb ^*^&*s that hire them. Seriously, how do you wake up in the morning and think, "Hey, we should hire some piece of ^&*( that ruined the company that just gave him the boot for ruining them?

How about getting the shares back up to the pre-leo-kills-touchpad-disaster $35 so I can sell them and break even.