Hewlett Packard CEO Leo Apotheker was replaced this week by former eBay CEO Meg Whitman and now we’ve learned that Leo will receive an exit package worth more than $25 million, not bad considering he’s been the company’s CEO for less than 11 months.
According to reports Apotheker has already earned most of his $1.2 million annual salary, while also having received a $4 million signing bonus and $4.6 million for “relocation assistance” and to offset a payment forfeited by former employer SAP. The company’s former CEO will receive a severance package of $7.2 million in cash and $18 million in stock.
Apotheker’s September 2010 contract specifically states that he would receive twice his salary and twice his average performance bonus in cash if he was forced out of the company. While the former CEO never earned a bonus given his short stint at the company they have agreed to pay him twice his salary as a bonus marker.
Casting an even wider golden umbrella over his resignation his stock grants will vest immediately to provide him with 800,000 shares of Hewlett Packard stock.
It’s not the first time HP has had to pay out big money to CEO’s in recent memory in fact Leo is the third HP CEO in just six years. When all is said and done Hewlett Packard has paid out $83.3 million to those heads of company.
At this rate the best way to earn millions as a CEO is to land the top job at HP and then just wait to get fired.
Do you think HP should demand better job performance clauses for their contracts? Unfortunately it likely won’t happen since they want to draw in top talent to their organization and removing those bonuses would stifle their headhunting efforts.