New HP CEO to get $8.6M to show up, $1.2M base salary, performance bonus, restricted stock

New HP CEO gets $8.6M to show up, $1.2M salary

NEW YORK — Hewlett-Packard’s new CEO, Leo Apotheker, is getting $8.6 million to sign on and move to the U.S. to lead the world’s largest technology company.

That’s addition to an annual salary of $1.2 million and performance-based bonuses, restricted shares and stock awards worth millions as the vest over the next three years.

To start, Apotheker, 57, is getting a sign-on bonus of $4 million and a relocation allowance of $4.6 million, according to his employment agreement Hewlett-Packard Co. filed with regulators Friday.

The former chief of German business software maker SAP will receive a performance-based cash bonus of at least $2.4 million, or double his base salary, for fiscal 2011, which begins in November. He could get an incentive bonus of as much as five times his annual base salary if he meets certain targets, HP said.

Within 30 days, Apotheker will also be granted restricted stock of 156,000 HP shares, which are worth $6.3 million based on their trading price on Friday afternoon. More than half of these shares are part of a one-time sign-on grant. The rest are part of Apothekers’ regular compensation.

In addition, HP’s new CEO will receive performance awards totaling 728,000 shares, half of which will vest in 2012 and the other half in 2013. Based on Friday’s stock price, these would be worth $29.4 million.

Apotheker was named as HP’s CEO on Thursday, getting a cold shoulder from investors who sent shares lower. Most analysts had expected HP to hire a replacement from within, or tap an outsider with a more impressive background than Apotheker’s.

He lost his job as head SAP earlier this year.

Apotheker replaces Mark Hurd, the company’s well-regarded CEO, who was ousted nearly two months ago amid allegations of sexual harassment and deceptive expense reports.

Shares of Palo Alto, Calif.-based HP fell $1.52, or 3.6 percent, to $40.55 in afternoon trading Friday. In the past 52 weeks, the stock has traded between $37.32 and $54.75.