HP's Whitman gets a $2M compensation raise for 2014, despite laying off thousands of employees

The technology giant's chief executive's compensation was up more than 10 percent as approximately 5 percent of the company's staff were laid off.

HP CEO Meg Whitman speaking at the company's Discover conference in 2012 (Image: HP)

As 15,500 employees at technology giant HP lost their jobs during the company's last fiscal year as part of a multi-year restructuring effort, its chief executive Meg Whitman received an 11 percent compensation rise.

Let that one sink in for a moment.

The Palo Alto, Calif.-based giant revealed in its latest proxy statement released Monday that Whitman's pay had increased from $17.6 million to $19.6 million over the past year in overall compensation, including salary, stock options, and other benefits.

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Meanwhile, its employee headcount was reduced from 317,500 to 302,000 employees, ending October 31, 2014. That's part of the company's "five-year turnaround," in which it will cut tens of thousands of jobs in order to streamline its internal operations.

The raise remains questionable, considering the company's recent performance.

Its fiscal 2014 earnings saw its revenue decline 2 percent year-over-year, with earnings down 1 percent year-over-year.

So, what was the reason for Whitman's considerable compensation jump?

HP's board approved her overall compensation because in their view her efforts to turn around a declining company are paying off.

"For fiscal 2014, considering the stage of our turnaround, the Board decided it would be appropriate to begin paying Ms. Whitman a salary consistent with the median of our peer group companies," the proxy statement said.

That means Whitman will begin being paid in line with her executive counterparts. Whitman started at HP with a salary of just $1 in 2012 (she still ended up with $15.3 million in compensation that year). But this year, the board gave her a base salary of $1.5 million, which accounted for most of the overall compensation raise.

HP's stock price can also be a measure of Whitman's overall progress during the past year. It has gone up by more than 38 percent year-over-year, ending October 31, 2014.

Running a company can't be easy. And, the board's decision is final. But it's a tough sell when you've got thousands of staff being handed pink slips while their former boss is receiving one-and-a-half million green ones.