$15 Million Payday for HP's Whitman

NEW YORK ( TheStreet) -- Meg Whitman could get more than $15 million for her first year as CEO of Hewlett-Packard ( HPQ), according to company filings.

It's a big payday even by the lofty standards of big-time CEOs. The chief executives of major public companies made a median of $9.6 million in 2011, the most recent year available, according to executive pay research firm Equilar.

But Whitman's $15.4 million pay package takes an unusual formula, one that she hopes will inspire confidence that she is serious about turning around the ailing computer company. For the second year in a row, she will receive just $1 in salary. She will also receive a $1.7 million bonus and about $220,000 worth of perks, almost all of that related to use of company airplanes.

The bulk of her pay, though, is tied to the company's performance. She is to receive $7 million in stock awards and $6.4 million in option awards. Options are the right to buy shares in the future at the price they're trading at when the options are granted, so they're worth something only if the shares go up.

Whitman became CEO in September 2011, just before the end of the 2011 fiscal year. For that year, she was paid $16.5 million, but almost all of it was in option awards that haven't yet vested.

Shareholders will be allowed to vote on whether they approve the pay packages for Whitman and for other top executives when the company holds its annual meeting March 20 in Mountain View, Calif. The vote is only advisory, meaning the company doesn't have to follow it. But a "no" vote would be an embarrassing mark on HP's public image. In 2011, before Whitman ran the company, shareholders rejected HP's executive pay plans, which forced the company to revamp its old pay formula and tie it more closely to company performance.

Shareholders gained another victory with this report. HP is recommending that shareholders vote for a proposal that would give some shareholders the right to nominate their own candidates for the board of directors, something that certain shareholders had been pushing for.

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