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HP CEO Whitman Earned One Dollar Plus $16 Million in 2011

Arik Hesseldahl — Fri, 03 Feb 2012 15:27:02 +0000

Hewlett-Packard released its annual proxy statement this morning, which, among other things, gives a look at what its top five executives made last year. Here’s the rundown:

CEO Meg Whitman, who upon becoming CEO agreed to take an annual base salary of $1, received more than $16 million worth of stock awards. Add on another $372,598 in other compensation, and the total value of her package was north of $16.5 million. Much of that other compensation stemmed from the period when Whitman was a director on HP’s board, and before she was CEO.

Under her employment contract, Whitman received an option to purchase 1.9 million shares of HP stock at a strike price equal to the value of the share price on the date of the grant, and subject to vesting requirements over time. As of today, 1.9 million shares would be worth almost $55 million. Whitman, the filing says, was the only one among the company’s named executive officers to receive an options award during 2011.

The filing also shows that CFO Cathie Lesjak made a base salary of $825,000, plus $9.3 million in stock-based compensation, $679,000 in incentive pay and $101,500 in other compensation, for a total of more than $11 million.

Todd Bradley, executive vice president and head of the Personal Systems Group, the division that HP briefly considered spinning out last year, made a base salary of $850,000, plus $9.3 million in stock-based compensation. He received $464,457 in incentive pay, plus $105,000 in other compensation, for a total just shy of $10.7 million.

Vyomesh “VJ” Joshi, the executive president and head of the Imaging and Printing Group, got an $850,000 salary, too, and nearly $8 million in stock awards, plus $638,355 in incentive pay, for a total of $9.8 million.

Shane Robison, the former chief strategy officer who retired last year, received a base salary of $781,250, plus stock awards worth $7.6 million and $606,506 in incentive pay, for a total of $9 million.

Finally, we have a full accounting of what former CEO Léo Apotheker made for his 11 months of service at HP’s helm. The full amount was $30.4 million. The precise amount had been the subject of some guesswork based on less-than-complete HP filings made around the time of Apotheker’s departure. The filings netted for HP a dubious award for “Worst Footnote of the Year” over at Morningstar’s Footnoted blog. My best guess had been in the $28 million to $33 million range.

Apotheker’s compensation breaks down like so:

$1,152,770 in base salary.
A $6.4 million bonus, of which $4 million was a signing bonus when he joined HP, and $2.4 million paid under the terms of his separation agreement.
Stock awards worth $17,660,759.
$5.2 million in “other compensation.” Within that was $2.9 million in relocation expenses related to Apotheker’s move from France to California and back; $1.7 million in “miscellaneous,” the majority of which, as explained in a footnote, was a “reimbursement for foregone non-competition payments that would have otherwise been payable by his former employer,” which refers to the software company SAP, where Apotheker was co-CEO.
Another $25,000 representing his personal use of HP aircraft.

Steve Ballmer Gets a "B" Grade From Microsoft's Board

Arik Hesseldahl — Mon, 03 Oct 2011 23:45:36 +0000

Software giant Microsoft just filed its annual proxy statement with the U.S. Securities and Exchange Commission, and it contains the assessment by the company’s board of directors of CEO Steve Ballmer.

Ballmer takes home a base salary of $682,000, and his bonus doubled it to just shy of $1.4 million. But it could have been higher. The board had the authority to award Ballmer a bonus worth up to 200 percent of his base salary and decided not to, opting instead to keep it at 100 percent.

But see, it’s not about the money. This is all the equivalent of change found under a couch cushion when compared to the worth of Ballmer’s holdings of Microsoft shares, which are worth about $14 billion or so. It’s about what Microsoft’s board thinks, especially at a time when some people have started to argue that it’s time for a change at Microsoft’s top.

There is, for instance, the issue of Windows Mobile, which Ballmer readily admits isn’t selling “as well as we would have liked.” And what about that 2 percent decline in Windows revenue?

The board’s verdict:

For fiscal year 2011, the Compensation Committee recommended and the independent members of our Board of Directors approved an Incentive Plan award of $682,500, which was 100% of his target award. The award was based on his performance appraisal and other relevant information considered by the independent members of the Board, including: Mr. Ballmer’s performance against his individual commitments; the operating income performance of the Company relative to 25 large technology companies (a group that includes most of our Technology Peers); successful product launches including Kinect for Xbox and Office 365, enhancements to Windows Azure and Bing; continued progress positioning the company as a leader in the cloud and cloud-based infrastructure; key partnerships with Facebook and Nokia; significant progress in development of the next generation of Windows; work toward the successful acquisition of Skype; lower than expected initial sales of Windows Phone 7; the 2% decline in revenue for the Windows and Windows Live Division; the need for further progress in new form factors; and an overall strong financial year in which Microsoft reported record revenue of $69.9 billion, record operating income of $27.1 billion, and record earnings per share of $2.69 representing 12%, 13%, and 28% growth, respectively.

Yay Ballmer. So how did the rest of the senior management team do? Here’s what the board says in the proxy filing.

CFO Peter Klein: He got $3.6 million, which was 120 percent of his target award, and credit for focusing on operating expenses and on the capital allocation plan, which resulted in $16.9 billion of cash returned to shareholders by way of share buybacks and dividends. He also did the due diligence on the Skype acquisition.

Kurt DelBene, president of the Microsoft Office Division: Annual revenue from the division increased 17 percent to $20 billion; Office 2010 was the fastest-selling version in the product’s history; and Office 365 got out the door. Plus Sharepoint, Exchange and Lync had “double digit growth.” Based on his fiscal year 2011 performance, DelBene received an incentive plan award of $7.25 million, 132 percent of his target award.

Steven Sinofsky, president Windows and Windows Live: Revenue is falling slightly in this group because of the decline in consumer PC sales, but Windows 8 is on the way. For all this Sinofsky, got $6.3 million or 90 percent of his target award.

Kevin Turner, COO: With Microsoft reporting annual revenue of $70 billion and operating income of $27 billion, up 13 percent, Turner earned an incentive plan award of $9.63 million, 110 percent of his target.

Apple Opposes Proposal on CEO Succession Planning

John Paczkowski — Fri, 07 Jan 2011 17:45:34 +0000

A few noteworthy nuggets from Apple’s 2011 Proxy Statement, filed today with the U.S. Securities and Exchange Commission.

In 2010 CEO Steve Jobs retained his $1 annual salary and some 5.5 million shares of Apple stock as well. “Since rejoining the company in 1997, Mr. Jobs has not sold any of his shares of the Company’s stock,” the filing reads. “Mr. Jobs holds no unvested equity awards. The Company recognizes that Mr. Jobs’s level of stock ownership significantly aligns his interests with shareholders’ interests.”

COO Tim Cook earned $59.1 million for the fiscal year, thanks to a $5 million bonus and $52.3 million in stock awards. Quite a spike from the $1.64 million he earned in 2009, but well-deserved given his performance, particularly when he filled in for Jobs during his medical leave of absence.

Included in the proxy statement is a shareholder proposal asking Apple to adopt a CEO-succession-planning policy and appended beneath it is a strongly worded statement from the company opposing it. “The Company recognizes that a highly talented and experienced management team, not just the CEO, is critical to Apple’s success,” it reads. “Accordingly, the Board already implements many of the proposed actions and maintains a comprehensive succession plan throughout the organization. While the Board strongly supports the concept of succession planning, it recommends a vote against [the proposal].”

Why?

Evidently, the board feels a written succession plan would give Apple’s rivals unfair advantage by publicizing its objectives and plans. It also fears that identifying potential successors to Jobs would invite other companies to recruit those people away from Apple. Finally, the board feels that its directors and Apple’s leadership can handle succession planning on their own. “The Company takes succession planning seriously, and the board has adopted a comprehensive process to ensure continuity and maintain the superior quality of its management team,” Apple said in the filing. “This process also allows flexibility to adjust to unanticipated changes in the market.”

Plus, Steve doesn’t like talking about it.

Sun CEO: Parting Is Such Tweet Sorrow

John Paczkowski — Thu, 04 Feb 2010 12:30:03 +0000

Sun CEO Jonathan Schwartz was the first CEO of a Fortune 500 company to put up his own blog. Late Wednesday night, he became the first CEO of a Fortune 500 company to step down from that position via Twitter.

“Today’s my last day at Sun,” Schwartz tweeted. “I’ll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/CEO no more.”

Fitting to end with a haiku broadcast to a microblogging service? Really? Seems a bit…precious. As Stowe Boyd observes, “Twitter can be used productively for many things, but resigning by haiku is not one of them.”

Schwartz’s departure, an inevitability if there ever was one, follows Sun’s (SUN) takeover by Oracle (ORCL) and the end of a nearly three-decade run as an independent company.

No word yet on what Schwartz plans to do next. But he’s leaving the company with a very fat chunk of change, so he’s likely in no rush to find something new. According to Sun’s definitive proxy statement, Schwartz stands to earn about $12 million from the severance package he negotiated, plus another $5.1 million or so for the shares he still holds in the company.

FURTHER READING:

Exclusive: Sun CEO Set to Resign

John Paczkowski — Mon, 25 Jan 2010 19:53:33 +0000

If Sun CEO Jonathan Schwartz’s recent all-hands memo to employees had all the sentimentality of a farewell letter, it’s likely because he’s preparing to leave the company. Sources close to Sun (JAVA) tell me Schwartz will soon resign as CEO, leaving the company in the hands of new owner Oracle (ORCL) and its very profit-minded leadership. Schwartz’s departure will likely coincide with final approval of the deal and an official change in control of the company. Somebody’s got to sign off on the final paperwork, right?

An inevitability, I suppose. But one that’s evidently approaching quite rapidly. Word of Schwartz’s impending departure comes as Oracle gears up for a Wednesday event at which it plans to reveal its strategy for Sun.

When he was appointed CEO in April 2006, Schwartz was charged with restoring Sun to its glory days. Sadly, he was unable to do it. And while he came up with some some inventive strategies–buying MySQL, open-sourcing Java, and Solaris–none were of much benefit to Sun financially. So now, with the former Silicon Valley icon about to become another acquisition notch in Oracle’s belt, Schwartz is leaving.

But he’s leaving with his pockets full. According to Sun’s definitive proxy statement, Schwartz stands to earn about $12 million from the severance package he negotiated, plus another $5.1 million or so for the shares he still holds in the company.

“Go, Oracle,” indeed.

Sun declined a request for comment.

FURTHER READING:

Google CEO Eric Schmidt's Friends and Family Fly for Free, Frequently

Peter Kafka — Tue, 24 Mar 2009 22:07:34 +0000

Google’s new 2008 proxy statement looks a lot like Google’s proxy statements from previous years: The company’s top executives received nice bonuses, though slightly smaller than last year’s. And Google’s (GOOG) ruling troika–CEO Eric Schmidt and co-founders Sergey Brin and Larry Page–all took home salaries of $1, and will make do by owning gazillions of dollars worth of Google shares.

One smallish change: Eric Schmidt’s friends and families spent a lot more time with him on the company jet last year.

At least that’s the conclusion I’m drawing from a footnote to the SEC document, which notes he was paid a total of $508,763 in “other compensation.” The breakdown: $402,562 for personal security costs, plus another $106,201 “paid by Google on Eric’s behalf for costs related to aircraft chartered for Google business on which family and friends flew in 2008.”

Google has consistently been shelling out about a half-million dollars in “other compensation” to Schmidt each year, so this is nothing new. The only difference is that Schmidt seemed to bring more friends and family on the Googleplanes last year, or having them take longer flights, than before.

In 2007, friends and family-related flight costs only totaled $4,000. And in 2006, Google shelled out $22,456 for “tax gross-ups” related to those flights, plus another $531 in “aggregate incremental costs.”

So what prompted Schmidt’s pals and relatives to take to the skies that much more this year? I’ve asked Google for more information, and will update if I get anything.

SHOCKER! Yahoo Board Recommends Against Icahn Board Slate

John Paczkowski — Fri, 23 May 2008 21:27:38 +0000

Yahoo’s board has–surprise!–advised shareholders to reject the slate of dissident directors put forward by billionaire investor-agitator Carl Icahn. “We do not believe that election of the Icahn Entities’ nominees to our Board of Directors is in the best interests of our stockholders,” Yahoo (YHOO) said in a preliminary proxy statement filed with the Securities and Exchange Commission this afternoon.