Hewlett-Packard might be three years into a troubled turnaround program, but you’d never know it based on the latest compensation package for chief executive Meg Whitman.
According to the latest proxy filing from HP today, Whitman received overall compensation of $19,612,164 for the fiscal year that ended in October 2014. That was an increase from $17,643,243 in compensation she received for the previous fiscal year.
Whitman received a salary of $1.5 million, up from the $1 she received each of the two previous years. It’s the first time she’s drawn a real salary since she became HP’s CEO in September 2011. The balance of the increase she received came in a mix of stock, options, and cash bonuses that were the result of achieving various fiscal targets laid out by HP’s board.
“For fiscal 2014, considering the stage of our turnaround, the Board decided it would be appropriate to begin paying Ms. Whitman a salary consistent with the median of our peer group companies,” the company says in the proxy filing. “Accordingly, Ms. Whitman received a salary of $1.5 million during fiscal 2014.”
The raise comes during a year in which HP experienced its third annual revenue decline under Whitman. The company reported $111.45 billion in revenue for FY 2014, down from $112.3 billion the previous year. Profits also fell from to $5.1 billion in FY 2013 to $5.0 billion in FY 2014, according to HP’s annual report.
Also, headcount dropped from 317,500 employees worldwide as of October 31, 2013 to 302,000 employees worldwide as of October 31, 2014.
The big bright spot would appear to be the stock price, which during the course of the 2014 fiscal year increased from $25.92 per share to $35.88.
So, why the love from HP’s board?
When setting compensation, the board looks to see how the company’s performance compared to targets set previously. In that regard, HP’s revenue of $111.45 billion was more than the $108 billion target. Profits were a bit lower than the target, so Whitman took a slight ding there. But cash flow exceeded targets by almost 15 percent. So bonuses were awarded.
In addition, the board took note of Whitman’s achievements over the year, including announcing a plan to split the company into two companies and how she oversaw the creation of HP’s best “portfolio of products and services in a decade and reinvigorated our culture of innovation” and “strengthened cloud leadership and capabilities.”