HP CEO Gets $8.6M Bonus in Scandal Year
Hewlett-Packard Co. said Tuesday that CEO Mark Hurd received an $8.6 million bonus in 2006, a year of strong performance but one plagued by scandal over its shady boardroom spying antics.
In its proxy filing with the Securities and Exchange Commission, HP said Hurd received the bonus on top of his $1.4 million base salary for his strong leadership in helping the company grow and become more efficient.
The computer and printer maker surged past International Business Machines Corp. last year to become the world's largest technology company.
HP's stock price has risen 95 percent since Hurd became CEO in April 2005, creating an additional $52 billion in shareholder wealth. HP's stock rose 29 cents to close Tuesday at $42.31 on the New York Stock Exchange.
The year proved to be a double-edged sword for HP, as investors applauded the company's gangbusters operational efficiency.
But Hurd briefly came under scrutiny when the company's shady surveillance scheme to ferret out the source of boardroom leaks to the media also became public.
Hurd said he didn't know about the deceptive tactics used to unearth the private phone logs of HP board members, journalists and their family members. He was not charged in the case, but felony charges were filed in California against former Chairwoman Patricia Dunn, former ethics chief Kevin Hunsaker, and three outside investigators.
Investors largely ignored the scandal, focusing instead on major operational milestones for the Palo Alto-based company.
In fiscal-year 2006, HP cracked $90 billion in annual revenue for the first time in the company's history. Its $91.7 billion in revenue was slightly more than IBM's $91.4 billion.
HP's strong sales of personal computers helped fuel much of that growth, as the company snatched the No. 1 ranking in worldwide personal computer shipments from Round Rock, Texas-based rival Dell Inc., according to data from market research firms Gartner Inc. and IDC.
Hurd's award for the year also included options on 500,000 shares of HP stock, according to the filing.
The company said Hurd's compensation was justified "based on HP's achievement of significant financial and restructuring goals during fiscal 2006, Mr. Hurd's role in leading HP to these strong financial results, and Mr. Hurd's attainment of nonfinancial performance goals."