HP Filing Reveals Apotheker’s $10m Golden Handshake

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Former HP CEO Leo Apotheker is to receive a staggering $13m (£8.4m) total severance package

What do you get if you oversee a 46 percent collapse in your share price and incur the wrath your investors? Well the answer is quite a lot actually, especially if your name happens to be Leo Apotheker, the former CEO of Hewlett-Packard.

It has emerged in a regulatory filing that Apotheker will receive a total of $10 million (£6.4m) in severance pay and $3.5m (£2.2m) in stocks.

HP’s board of directors finally lost patience with Apotheker last week and fired him, replacing him with the former eBay CEO Meg Whitman.

Golden Handshake

But he will not be forced to fly in ‘cattle class’ any time soon.

According to the filing with the US Security and Exchange Commission, Apotheker will receive a  “severance payment in the amount of $7.2m payable in instalments over the next 18 months”.

In addition there is an annual bonus of $2.4m (£1.5m), despite the fact that Apotheker only lasted 11 months in the HP role, and not a year.

In addition Apotheker is being handed a valuable load of stocks worth approximately $3.5m (£2.2m). And also lets not forget HP will cover up to $300,000 (£192,731) on any loss he makes from selling his California residence and moving back to France or Belgium.

The filing also reveals that incoming HP chief executive Meg Whitman will receive a base salary of just $1 (£0.06) a year, compared to Apotheker’s annual salary of $1.2m (£770,000).

Controversial Choice

It should be noted that HP has previous form here.

When former CEO Mark Hurd left HP amid allegations of sexual harassment and dodgy expense claims, his severance package included a $12.2m (£7.8m) cash payment and $30m (£19m) worth of stock that he gained by exercising options after his resignation.

Apotheker’s reign at HP had certainly been a rocky one. He was a controversial selection to replace Mark Hurd from the outset, especially consider that Apotheker’s previous role as SAP CEO saw him stepping down the back of poor results at the German software maker.

And under his tenure at HP, the company came under increasing pressure that led to falling sales and investor unrest, as the market value of the firm plunging by nearly $40 billion (£26bn) in just 11 months.

In August, Apotheker announced a huge change of direction for the company, announcing that HP was ditching its WebOS portable devices. He also revealed he was considering spinning off HP’s PC business, as well as purchasing British software firm Autonomy for $10.3 billion (£6.6bn).

Since that time, HP’s webOS-based TouchPad tablets have proved to be hot sellers at the firesale price, and the purchase price of Autonomy has been described as far too high.

"You're fired - but it won't hurt at all!"

 

Meanwhile investors have sued over the company “misleading” them over its intentions for PCs and tablets.

In a poll today, it emerged that eWEEK readers would rather have Lord Alan Sugar as CEO of Apple, or even have Mark Hurd back.

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Author: Tom Jowitt
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