HP shareholders might just applaud CEO Mark Hurd's hefty 2006 pay package, while those with more emotional ties to the company's historical reputation will recoil in horror.
Hurd pocketed close to $20m last year with $1.4m coming from his salary, $8.6m coming from bonuses and millions more arriving in the form of stock-based and other compensation. Believe it or not, the total 2006 payout fell well short of Hurd's $24.4m 2005 bonanza, which included signing and relocation bonuses. Because, you know, moving from NCR in Ohio to HP in California was a real burden.
Hurd's $8.6m bonus proved a dramatic increase from $5.1m "earned" in 2005.
HP's big papa no doubt deserves every million, according to some investors. His retirement cuts, layoffs and paperclip reuse programs have resulted in a fitter HP - one capable of a near doubling in share price. (Maybe former CEO Carly Fiorina should pay Hurd a visit and ask for a slice of his 2006 package, since she was responsible for HP's turnaround, according to her.)
Team Spin at HP emphasized that executive pay relates more closely than ever to meeting performance goals. All-stars will receive ample rewards for driving growth.
The public relations staff, however, didn't mention how HP's spy scandal played into Hurd's compensation. Surely, Integrity isn't just a brand name at the Silicon Valley icon? Tarnishing HP's image on a worldwide scale must cut into the overall performance package somewhere.
Eh, maybe Hurd tossed a fiver into the trash as penance.
In the "other compensation" category, Hurd notched $119,000 for security services, $111,000 for jet flying and $18,000 for financial counseling. A man needs to know what to do with all this cash.
HP's top five executives received similar plush deals in 2006. Printing chief Vyomesh Joshi saw his bonus double to $2.4m, while EVP Ann Livermore and CTO Shane Robison almost quadrupled their bonuses to more than $2.6m.
All told, we have calculated HP's top five executives bringing in $60m during 2006.
The release of such figures comes on the same day that the Wall Street Journal ran a story titled "More Pressure on Executive Pay."
The story claims that the number of shareholder proposals to link executive pay with performance will double during 2007.
"There's no question that executive comp is very much in the crosshairs," Carol Bowie, vice president of research at Institutional Shareholder Services told the paper.
Such stories appear a couple of times a year with nothing every really happening to dampen the executive glorification culture.
You'll find HP's executive compensation figures on page 39 of its Form Def 14A filing with the US Securities and Exchange Commission, which is available here. ®