Los Angeles: Hewlett Packard Co will pay fired CEO Leo Apotheker nearly USD10 million in severance and bonuses, a handsome payout for a much-criticized leader that dwarfs new chief Meg Whitman's USD1-a-year base salary.
HP will pay Apotheker, who during an 11-month term slashed sales forecasts several times and engineered the unpopular acquisition of British software firm Autonomy, a USD7.2 million severance and a USD2.4 million annual bonus under a 2005 "pay-for-results plan," the company said in a filing with the U.S. Securities and Exchange Commission.
In addition, he gets to keep and vest 156,000 previously awarded restricted shares, will be paid expenses for relocating to France or Belgium, and will be compensated for any losses on the sale of his home in California to the tune of USD300,000.
HP appears to treat outgoing CEOs well, even though Apotheker was the third straight to be shown the door. His predecessor, Mark Hurd, got an exit package estimated at about USD34.6 million after he was fired in August 2010.
In contrast, HP will pay former eBay Inc CEO Meg Whitman a base salary of just USD1 per year. She has the option to buy 1.9 million of the company's shares and is eligible for a performance bonus of USD2.4 million in 2012, the company said.
Whitman joins a select club of high-profile CEOs who have drawn dollar-a-year salaries, including Apple's Steve Jobs, Yahoo Inc founder Jerry Yang and Google executives Larry Page, Eric Schmidt and Sergey Brin.
Executive Chairman Ray Lane gets the option to buy 1 million shares, the filing shows.
HP is struggling with a crisis of confidence among Wall Street investors. Its latest decision, to name Whitman without performing an exhaustive external candidate hunt, has drawn criticism for its seeming hastiness.
According to the Wall Street Journal, the company has hired Goldman Sachs to defend itself against potential activist investors who could push for change.
HP's shares rose 2.5 percent to close at USD23.78 on Thursday on the New York Stock Exchange.
First Published: Friday, September 30, 2011, 13:01