How many premium portable sales = HP CEO's 2022 compensation?
977 EliteBook x360 830 G6 Notebooks makes one Enrique Lores
PC and print biz HP paid its CEO more than $20 million in the corporation's fiscal 2022 calendar – a 12 month period when revenue dipped and profit plunged in the face of weakening economies around the globe.
Enrique Lores, who moved into the top office mid-2019 after Dion Weisler quit for personal reasons, saw his base salary rise by four percent to $1.25 million - taking him close to HPE counterpart Antonio Neri.
In addition, Lores received $12.84 million in stock awards, $5.34 million in option awards, $1.445 million in non-equity incentive plan, and $199,000 for all other compensation, including personal aircraft usage and security.
Mathematically minded readers will have already worked out this meant the executive's compensation pot was valued at $21.079 million, up from $20.73 million in the prior year. HP would need to sell around 9,777 units of its HP EliteBook x360 830 G6 Notebooks to pay for its chief exec's total financial package. That's a lot of premium portables.
Executive pay at HP is weighted by four metrics that each account for a quarter of the overall score: net revenue, adjusted non-GAAP operating profit, non-GAAP free cash flow, and management business objectives.
HP reported revenue of $63.7 billion in its fiscal 2022, versus the target of $67.4 billion. It made $5.8 billion in adjusted non-GAAP operating profit against a goal of $6.3 billion, and fell short by $500 million in efforts to generate $4.5 million in non-GAAP free cash flow
The MBOs included growing strategic areas, which generated more than $11 billion in revenue; investing in longer-term growth by buying Poly; making progress with an ERP deployment by "retiring multiple legacy systems"; environmental aims; and launching the Future Ready plan. The latter involved saving $1.4 billion annually by 2025, and job losses of up to 6,000 HPers are wrapped up in this.
On the theme of exits, should Lores' employment be terminated by HP under a "Not for Cause" scenario, ie – he didn't do anything deserving of being fired – then his payment is $25.76 million. In a "Change of Control" scenario, he would get almost $30 million.
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Eye-watering sums. But think of the pressure of having thousands of people's livelihoods dependent on your decisions and conscience. Is that worth $21 million a year? You, dear readers, be the judge.
In terms of other execs, Marie Myers, who was made CFO in 2020, got $6.8 million, down from $7.2 million. Alex Cho, president of Personal Systems got $8.77 million, down from $9 million, and Print boss Tuan Tran got $8.69 million, up from $8.32 million.
HP reported financial results for Q1 of fiscal 2023 this week, and it is projecting a bumpy ride for the year ahead. It's during times like these that the role of the CEO comes into its own. Or should do. ®