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Meg Whitman's starting salary as HP CEO? $1 per year

Summary: Meg Whitman starts off with a buck and a lot of stock. Léo Apotheker walks away with millions.

Rachel King

By for Between the Lines |

Meg Whitman is not the first new chief executive to start off with a $1 per year salary, which serves as a symbol that she has to earn her keep more than anything else.

As Hewlett-Packard's CEO, Whitman can buy 1.9 million HP shares over the next eight years -- although Whitman cannot cash out the majority of those options until HP's stock reaches 120 percent or more of the company’s current share price. After the bell on Thursday, the share price was $23.78, which is up ever-so-slightly.

On the flip side, former HP CEO and president Léo Apotheker will be walking away with a sizable chunk of change, although AllThingsD reports that his exit is actually cheaper than expected considering his severance was up in the air due to the suddenness of his departure.

According to the 8-K form that HP filed with the U.S. Securities and Exchange Commission on Thursday, Apotheker will get the following, among a few other perks:

  • Severance amounting to $7.2 million payable in installments over the next 18 months
  • $3,557,800 of restricted stock
  • An aggregate of 424,000 of the 728,000 performance-based restricted stock units (Apotheker waived the right to the rest as they would have vested on October 31, 2012.)
  • Relocation costs for him and his wife back to France or Belgium
  • Up to an additional $300,000 for any loss Apotheker incurs on the sale of his California residence
  • An extra $2.4 million under the Hewlett-Packard Company 2005 "Pay-for-Results Plan," which is intended to reflect nearly 11 months of service

That last one almost cries out as ridiculous considering that HP's market value has plummeted by $38 billion since Apotheker was hired for the job.

Related:

Topics: Legal, CXO, Enterprise Software, Hardware, Hewlett-Packard

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8 comments
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  • Wow, I gotta land one of these gigs

    Even if you fail, you win. Meanwhile, Im sure the other employees are getting chewed for the poor performance of HP and told that bonuses are being slashed.
    otaddy
    Reply Vote

  • Leo should have used a gun, it would be more honest

    The Board of Directors at HP is just whacked, not only for giving Leo the contract in the first place, but then giving him the "performance bonus" for destroying half the company's value in less than a year.
    terry flores
    Reply Vote

    • Leo did not destroy, but actually saved HP from billions of dollar losses

      @terry flores: ... that were caused by media/wall-street darling Mark Hurd, with his delusional idea that spending billions on failure WebOS devices producer Palm was a good idea, as well as delusion that putting this failure as the future of HP will make a difference and turn the failure into the success.

      Apotheker had the acumen to see after giving Rubinstein a chance and loosing some money that <b>HP will suffer billions of dollars of these multiple failure projects</b>, so he killed it.

      This was the best business decision by HP in the latest years, and the damn board supported it. And the new Whitman lady does not deny it either.

      The only reason why Apotheker had to go was that shareholders needed a PR sacrifice, given the fact that Leo had to make unpopular decision that exposed huge HP's mistakes from Mark Hurd times.
      DDERSSS
      Reply Vote

  • They could have bought a magic eight ball...

    for a lot less and had a WAY better CEO. Typical corrupt brain dead board.
    jackbond
    Reply Vote

  • RE: Meg Whitman's starting salary as HP CEO? $1 per year

    What a crock. Their last CEO was so bad that they know that with any new CEO that the anticipation alone would raise the stock. It certainly does not need to stay there for her to get paid. This is also a example of a Buffet style tax dodge. Her income tax will be based on the capital gains of the stocks and options she gets. These will be taxed 20% less than what she would have to pay if she took this same money as a salary. It looks nice on paper but it is just more of the same old same old. Given the current free ride CEOs get with stocks vs a salary, I am surprised you do not see everyone accepting a dollar.
    alricsca
    Reply Vote

  • Good Luck

    I do wish both HP and Meg Whitman good luck. HP made great computers and printers in the past and it would be good if they stay in the market.

    HP has made too many poor choices when it comes to hiring a CEO. Makes me wonder what is considered "talent" to spend so much money for a CEO who causes the company to tank and leave with a huge severance.
    sboverie
    Reply Vote

  • Perceptions

    "Makes me wonder what is considered "talent" to spend so much money for a CEO who causes the company to tank and leave with a huge severance."

    It is this, or at least the perception of this, that is helping to fuel middle America's negativity towards CEOs and Wall Street in general.
    sissy sue
    Reply Vote

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    cmakrekwe50-24379030934799361616661660239752
    Reply Vote
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