Is HP really paying Leo Apotheker $1.2m a year basic plus $4m signing on fee?

How much is Leo Apotheker worth to HP? Is he like an over paid football star - worth so much because he brings in even more income for his employers?I don’t know what the going rate for the CEO of a major IT company is, but it looks like...

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How much is Leo Apotheker worth to HP? Is he like an over paid football star - worth so much because he brings in even more income for his employers?

I don’t know what the going rate for the CEO of a major IT company is, but it looks like Leo Apotheker will pull down a basic £1.2 million dollars a year for his new job at HP.

In addition his target bonus is twice the base salary, with a cap of five times base salary in his first year.

That is according to a document that looks official, which is out on the web.

The document states:

Executive’s target annual incentive for fiscal 2011 will be at least 200% of Base Salary and his maximum target opportunity will be 500% of Base Salary, based upon specified levels of performance goals being achieved.  For subsequent fiscal years, beginning with fiscal 2012, Executive’s target bonus shall be at least 200% of the Base Salary, and maximum target opportunity shall be as determined by the Committee

Then there is the $4 million signing on bonus:

On the sixtieth (60th) day after this Agreement is executed by both parties, Executive will receive a signing bonus equal to $4,000,000 (the “Signing Bonus”).  If Executive’s employment terminates other than by reason of death, Disability (as defined below) or termination without Cause (as defined below) within eighteen (18) months of the Effective Date, Executive will return to the Company an amount equal to the Signing Bonus multiplied by a fraction with the numerator equaling 18 less the number of whole months that have elapsed from the Effective Date to the date of Executive’s termination of employment (the “Date of Termination”) and a denominator equal to eighteen (18).

Then there are the share options:

Within 30 days of the Effective Date, Executive will be granted 76,000 shares of the Company’s common stock under the Company’s 2004 Stock Incentive Plan as in effect on the Effective Date (the “Stock Plan”).  Except as otherwise provided in the Stock Plan or hereunder, 50% of those shares (38,000) will vest and be non-forfeitable if Executive is employed on October 31, 2011 and the remaining 50% (38,000) will vest and be non-forfeitable if Executive is employed on October 31, 2012.

Best not forget the relocation costs either:

(f)                                Relocation Benefit.  In accordance with Company’s relocation policy, Executive will receive the standard Company relocation package.  However, in light of the substantial payments and benefits Executive is forfeiting from his prior employment to accept employment by the Company, and the substantial expense Executive will incur to move his residence to, and acquire a new residence in, the United States, Executive’s relocation allowance will equal $4,600,000 (the “Relocation Allowance”), allocable $2,900,000 to relocation (the “Relocation Payment”) and $1,700,000 to the forfeiture of payments and benefits (the “Forfeiture Payment”).

Nice work if you can get it. There is already plenty of controversy surrounding Apotheker’s appointment, particularly after his torrid time at the helm of SAP.

Some HP customers and staff might have preferred a pay structure with a lower bonus and a higher performance related element. Some might find the revolving door of senior IT company executives rather distasteful.

Whatever you think, they are well rewarded for all that transatlantic air travel and all those nights spent in five star hotels.

Nice work if you can get it. There is already plenty of controversy surrounding Apotheker’s appointment, particularly after his torrid time at the helm of SAP.

Some HP customers and staff might have preferred a pay structure with a lower bonus and a higher performance related element. Some might find the revolving door of senior IT company executives rather distasteful.

Whatever you think, they are well rewarded for all that transatlantic air travel and all those nights spent in five star hotels.

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