Hewlett Packard Co will pay fired CEO Leo Apotheker nearly $10 million in severance and bonuses, a handsome payout for a much-criticized leader that dwarfs new chief Meg Whitman's $1-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 AUTN.L>, a $7.2 million severance and a $2.4 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 $300,000.
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 $34.6 million after he was fired in August 2010.
In contrast, HP will pay former eBay Inc CEO Meg Whitman a base salary of just $1 per year. She has the option to buy 1.9 million of the company's shares and is eligible for a performance bonus of $2.4 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 $23.78 on Thursday on the New York Stock Exchange.
(Reporting by Abhiram Nandakumar in Bangalore and Edwin Chan in Los Angeles; Editing by Gary Hill)