Incoming HP CEO Mark Hurd will get a $2m (£1.1m) signing bonus and a $1.4m salary for taking the helm at HP, but he stands to make far more if he can successfully boost the company's flagging share price.
According to documents filed late on Tuesday with the Securities and Exchange Commission, HP's new CEO will receive 700,000 HP stock options and stand to earn tens of millions of dollars more as part of short-term and long-term bonus programs. The options will vest over a four-year period.
The 48-year-old executive will be given an additional 400,000 stock options and 450,000 shares of restricted stock to make up for the equity compensation he gave up when leaving NCR. The stock will vest over three years. The restricted shares alone have a value of more than $8m.
Hurd, who became NCR's top executive in March 2003, took home roughly $2m in salary and bonuses last year at NCR, up from about $1.5m the prior year, according to NCR's most recent proxy statement.
Hurd will also be given a $2.75m "relocation allowance" in moving from NCR's Dayton, Ohio, headquarters.
Among more minor benefits spelled out in the pact are Hurd's allotment of time off: He is to get no less than five weeks of paid time off each year — a very generous allocation for the US market. In addition, he is entitled to other benefits given to HP executives, such as financial counselling and executive physicals.
Hurd's employment contract also outlines what should happen if things don't work out at the computer maker. According to his contract, Hurd stands to receive a one-time cash payment equal to 2.5 times Hurd's then-current base salary plus his target bonus amount. Hurd would also benefit from continued health benefits, the vesting of all stock options and partial vesting of restricted stock.
Former HP CEO Carly Fiorina received more than $21m in severance when she left HP earlier this year. In fiscal 2004, Fiorina received $1.4m in salary and $1.57m in bonuses. The year before, Fiorina made $1.24m in salary and $2.1m in bonus.
Talkback
I will NEVER buy an HP or any of their products!!!
It pays more at HP to not perform than it is to perform. Great incentive and example for the rest of the company. Corporate America is broken.
That any employee should receive the remuneration anything like both of these executives have received is repugnant. It's just a sad reminder of the inequity that exists throughout organisations these days. Let's face it. They do a day job like the rest of us. They should be ashamed to receive that kind of deal.