Meg Whitman's salary as HP's new CEO: $1.00* | webOS Nation

Meg Whitman's salary as HP's new CEO: $1.00*

by Derek Kessler Fri, 30 Sep 2011 8:09 pm EDT

It’s not uncommon for a Silicon Valley executive to receive a token salary of one dollar. Former Apple CEO Steve Jobs did it for fourteen years, as have Google Co-Founders Larry Page and Sergei Brin and Google Chairman Eric Schmidt. Of course, they’re not actually working for $1.00 a year – there’s always a massive package of benefits ranging from stock options to use of the company jet(s) to multi-million guaranteed bonuses.

The idea is to directly tie the executive’s performance to their compensation, thus encouraging them to work harder to make the company more valuable and have more money all so they can take home more cash at the end of the day. New HP CEO Meg Whitman has signed a similar deal, taking home a $1.00 paycheck every year (suitable for framing or wrapping fish) with hefty stock options and bonuses available.

Whitman has the option to purchase up to 1.9 million discounted shares of HP stock over the next eight years, though those shares will only be made available if HP’s stock value stock value increases considerably (see how the whole performance = profit = compensation thing works?).

Additionally, Whitman will get a minimum annual bonus of $2.4 million, with board-approved increases above that depending on HP’s cash flow. And there’s her hypothetical severance package: 1.5 times her base annual pay (so, $1.50) plus her average bonus over the past three years (so, a minimum of $3,600,001.50). Obviously we’re hoping it doesn’t come to that, because we don’t have the time to get to know yet another HP CEO.

Source: AllThingsD