HP’s Whitman Gets $15.5M Compensation Despite Record $12.7B Loss

HP's Whitman Got $15.5M In Stock, Incentive Pay Despite Loss

 @DavidZie
on January 14 2013 12:13 PM
Margaret (Meg) Whitman, CEO of Hewlett-Packard Co.
Margaret Whitman, CEO of Hewlett-Packard Co. (NYSE: HPQ), shown during her unsuccessful 2010 campaign for governor of California. Reuters

Hewlett-Packard Co. (NYSE: HPQ), the No. 1 computer company, awarded CEO Margaret (Meg) Whitman total compensation of $15.36 million last year despite reporting a record annual loss of $12.7 billion, or $6.41 a share.

To be sure, Whitman, 56, took only $1 in salary. The former CEO of eBay Inc. (NASDAQ:EBAY) was handed stock awards valued at $7.04 million, options of $6.4 million, incentive plan compensation of $1.68 million and $220,991 in other compensation for the year ended Oct. 31. She also had use of the corporate jet.

Still, Whitman’s compensation could have been about 30 percent higher had the Palo Alto, Calif., company performed better in her first year at the helm, said the proxy for HP’s March 23 annual meeting scheduled for the Computer History Museum in Mountain View, Calif.

Whitman, who started a two-year restructuring of the company that could see the elimination of as many as 25,000 jobs, did a good job in her first full year as CEO, the compensation committee headed by former Alcatel-Lucent (NASDAQ:ALA) Co-CEO Patricia Russo said.

Whitman “exceeded her objectives,” the committee determined, by starting the turnaround, promoting hiring from within and emphasizing research and development, so that she justifies her stock options that will be valued by the company’s future performance.

The defeated 2010 Republican candidate for governor of California ranks 285 on the Forbes 400 list, with an estimated personal worth of $1.7 billion, even after spending about $140 million on her campaign. She lost to Democratic former Gov. Jerry Brown by a large margin.

Whitman’s CFO, Cathie Lesjak, collected an $825,011 salary, the same as in 2011, but her total compensation dipped to only $6.7 million from $11 million a year earlier. Todd Bradley, the executive VP for Printing and Personal Imaging, got a similar salary. His total compensation also fell to $7.36 million from $10.69 million.

The only top HP executive who got a higher salary last year was David Donatelli, executive VP for the enterprise group, whose pay rose $25,000 to $825,000 due to his promotion.

Going forward, the compensation committee said it will align as much of pay and stock awards as possible to performance. HP said it had been advised by two outside compensation specialists on executive pay and that Whitman had advised on the pay for all subordinates but not for herself.

Meanwhile, shareholders attending the HP annual meeting will be asked to re-elect all the incumbent directors because of lack of retirements as well as vote on two shareholder request for a human rights committee “to adopt human rights principles” which “could significantly impact” the company.

One request comes from a Chinese-surnamed shareholder while the other is sponsored by religious groups including the Board of Pensions of the Presbyterian Church, Global Ministries of the United Methodist Church and the Benedictine Sisters of Boerne, tex.

Shareholders of Apple (NASDAQ:AAPL) have been asked to vote by a similar proposal for the second consecutive year due to concern about worker abuses in Asian factories, mainly in China.

HP, like Apple, advised against a “yes” vote, saying the company already has a human rights manager and is a member of the Global Business Initiative on Human Rights and the Business for Social Responsibility Human Rights Working Group.

Shares of HP rose 52 cents to $16.68 in Monday trading. Since Whitman became CEO in September 2011, they’ve lost 29 percent of their value.

 

 

 

 

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