HP CEO Apotheker nabs rich compensation deal

leo_apotheker.top.jpgHP ended two months of speculation on when it announced that Léo Apotheker will take the helm November 1. By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Léo Apotheker was the only person offered the CEO job at Hewlett-Packard, company leaders said Friday in a press conference to discuss their surprising choice.

HP ended two months of speculation on Thursday when it announced that Apotheker, the former CEO of business software firm SAP (SAP), will take the helm beginning November 1.

"Our board of directors cast the net very far and very wide both internally and externally," Bob Ryan, the lead independent director of HP's board, said on the call. "We ended up with six people who could have done the job."

In the end, the board unanimously chose to offer the job to Apotheker, Ryan said.

Apotheker will receive an annual salary of $1.2 million, plus a $4 million signing bonus and an additional $4.6 million for relocation assistance and to offset payments from SAP that Apotheker forfeits by taking the new job, HP said. He's also eligible for a cash bonus of $6 million next year.

Apotheker will also collect a boatload of HP stock. He'll receive 156,000 shares of HP, vesting over the next two years, as long as he remains employed with the company over that time period. He'll also have the opportunity to earn up to 728,000 shares of stock, vesting over the next three years, as a bonus for hitting performance targets.

All totaled, Apotheker's hiring agreement with HP gives him the opportunity to collect cash and stock compensation over the next three years worth up to $53 million, based on HP's closing stock price on Thursday.

Former CEO Mark Hurd received a $1.4 million annual salary and a $2 million signing bonus when he was hired in 2005, plus a $2.8 million relocation package. Including perks and stock, HP valued Hurd's total compensation package last yest at $30.3 million.

Todd Bradley, executive vice president of HP's personal systems group, and Ann Livermore, the head of the company's enterprise business, were widely considered to be among the leading contenders for the open CEO spot.

Hurd resigned from his position as HP's CEO and chairman of the board on Aug. 6 after the company said that he submitted false expense reports to hide a relationship with a marketing contractor.

Cathie Lesjak, HP's chief financial officer, had been acting as interim CEO. She took herself out of the running for the permanent CEO position.

"My heart is in being a CFO, and my family and I are pleased I'm going back to that," Lesjak said. "I have never felt more confident about our business."

Apotheker said HP is "undervalued" and can compete in several areas. It already has a "lock" on the hardware market, and should pay more attention to software, he said.

"Software is the glue," Apotheker said. "It's how we can make sure that the various parts of our technology work together."

The search took almost two months -- about as long as HP took to replace former CEO Carly Fiorina, who was forced out by HP's board in 2005 after a rocky tenure.

Apotheker, 57, comes with his own checkered past. He served for a short time as CEO and for many years in other top roles at SAP, which is struggling to hold its market share against onslaughts from Oracle (ORCL, Fortune 500) and IBM (IBM, Fortune 500). After more than two decades at SAP, Apotheker was ousted in 2009.

In early trading on Friday, shares were HP (HPQ, Fortune 500) were down 2.6%, at $40.96. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Sponsors

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.