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HP makes Hurd the $20m man
Cash register king hears bonuses go Ker-ching!
The glorious packages awarded these days to high-profile CEOs have become humdrum. Ridiculous up front bonuses, lavish salaries, more options than Hugh Hefner, caviar shipment quotas, declawed and extra cuddly Koala bear imports for the children - you know the drill.
HP's new brass monkey Mark Hurd has followed his peers to this promised land.
He'll be starting off with a $2m signing bonus, which is then complemented with a $1.4m base salary. Add to that a guaranteed $2.8m annual bonus and things are already looking pretty good. If Hurd is a real star and, say, meets a performance goal or two, he'll be able to kick that annual bonus right on up to $8.4m. Screw the Koalas, it's Panda time. The HP chief is also able to earn between $4.2m and $12.6m in long-term perks, according to a recent HP filing with the US Securities and Exchange Commission.
HP then granted Hurd an aircraft carrier-load of stock options potentially worth $15m.
But the real joy is in the details.
For possible pain and suffering, Hurd will be awarded monies for up to a 20 per cent decline in the price of NCR stock "as covered by his vested options" on $850,000 shares. The new CEO will also get a $2.75m relocation allowance, home security services, a mortgage interest subsidy for 4 years, a free house for 1 year, free shipping for all his household goods and 3 cars, and one year's worth of storage.
Quite the haul.
The best part of the deal, from Hurd's perspective, has to be that he doesn't even need to meet near-term performance goals to receive tons of bonus cash. "For the second half of fiscal year 2005 and the first half of fiscal year 2006, all performance goals will be deemed to have been achieved at target," HP said.
So this "incentive" is no incentive at all. Hurd can stay in bed all day, eating grapes, and penning a follow-up to his gripping debut book The Value Factor: How Global Leaders Use Information for Growth and Competitive Advantage - and just pocket the cash. Ker-ching!
With all this, Hurd extends HP's tradition of coating CEOs in perks and currency. And they say Hurd doesn't have Fiorina's flair. ®