Whitman gets a $1 salary, Apotheker gets millions

Hewlett Packard has released some details about the payoff received by ex-CEO Léo Apotheker and the salary enjoyed by replacement Meg Whitman, and it's fair to say there's something of a disparity.

Apotheker, for his part in presiding over the company as its share price dropped by $38 billion of a period of just under a year, is set to receive a severance payout of $7.2 million spread out over the next eighteen months.

That's an impressive golden farewell, but there's more. Apotheker will also receive an additional $2.4 million under the HP 'Pay-for-Results' performance-based bonus scheme. That's right: the man at the helm during HP's precipitous market value slide performed well enough to get a bonus equal to many people's dream lottery win.

It gets better: Apotheker will also receive relocation costs for both him and his wife should they decide tor return to France or Belgium, along with up to $300,000 insurance against loss when he sells his California home.

HP isn't done with Apotheker yet: as a further farewell gift, Apotheker gets $3,557,800 in restricted stock, and a further 424,000 restricted stock units as a performance-based bonus.

If HP is willing to lavish these riches on an outgoing chief executive who presided over the company's decline, you'd be forgiven for thinking that it will reward Meg Whitman, ex-eBayer and the company's great hope for the future, with a salary beyond her wildest dreams.

Not quite: according to the company's filing with the Securities and Exchange Commission, Whitman's starting salary is a whole $1 per annum.

Okay, so she won't starve: in addition to the symbolic salary, Whitman will also be given options on 1.9 million HP shares over the next eight years, on the understanding that they can't be cashed out until the stock has risen to 120 per cent of its current value.

Tying a new CEO's salary to company performance in this way isn't uncommon in business, and usually indicates that investors are getting antsy at a company's performance. "Look," it attempts to say, "our new boss is so sure of our success they'll practically work for free to ensure it."

Taking the stock into account, and assuming that it reaches the 120 per cent level and no higher, Whitman's total 'salary' will be $54,218,408 over the eight-year period, or an impressive $6,777,301 per year - not counting the investment made during the purchase of the options. It's also worth mentioning that this figure doesn't include any raises that might be due over that eight-year period, nor any performance-related bonuses which may apply.