HP/COMPAQ: Fiorina, others to get post-merger pay raise

Hewlett-Packard (HP) plans to give Chairman and Chief Executive Officer Carly Fiorina and several other executive officers a pay raise if it merges with Compaq Computer.

It will negotiate a new employment contract with Fiorina promptly after completion of the merger, offering more pay and stock options to take account of her increased responsibilities, the Palo Alto, California, company said in a regulatory filing Thursday.

In fiscal year 2000 and fiscal year 2001, Fiorina received a salary of US$1 million, according to the filing with the U.S. Securities and Exchange Commission (SEC). She received no bonus in fiscal year 2001, and returned a guaranteed bonus of $625,000 paid for the second half of fiscal year 2000 when the company failed to meet its net-profit objectives, the filing said.

Others in line for more compensation include Robert P. Wayman, executive vice president and chief financial officer; Pradeep Jotwani, president of HP's Consumer Business Organization; Ann M. Livermore, president of HP Services; Duane E. Zitzner, president of Computing Systems; and some executive officers of Compaq, including Michael Cappellas, its president and chief executive officer.

HP said it expects the executives' new employment agreements will include increases in their salaries, potential for a bonus that may equal or exceed that salary, and the granting of stock options. Vesting of options will likely depend on continued service with HP and on meeting performance goals such as boosting the stock price, according to the filing.

The section of the filing on executive compensation was signed by the compensation committee, chaired by Phillip M. Condit and accompanied by Sam Ginn and Walter B. Hewlett. The filing noted that Hewlett did not approve the section on new employment agreements.

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