Hewlett papers back CEO pay claims

SAN JOSE, CALIFORNIA - Walter Hewlett released internal Hewlett-Packard Co. documents Thursday to back up his claim that the company has considered lavish pay plans for chief Carly Fiorina and Compaq Computer Corp. head Michael Capellas. <br> <br> HP spokeswoman Judy Radlinsky said the company was ``outraged&#39;&#39; by Hewlett&#39;s action, which she called ``yet another blatant breach of fiduciary duties.&#39;&#39; <br> <br> But Hewlett said stockholders have a right to know the costs HP might incur from paying its leaders if the $22 billion acquisition of Compaq is approved. Investors are scheduled to vote March 19. <br> <br> Hewlett, an HP director who serves on the board&#39;s compensation committee, said Tuesday that the committee last fall essentially approved new two-year contracts for Fiorina and Capellas worth a total of $117.4 million in salary, bonuses and stock options. <br> <br> HP said Hewlett&#39;s claims were misleading because the issue of the executives&#39; future compensation has been put off until after the merger goes through, so HP can consult with outside experts and draft a set of performance-based incentives. <br> <br> HP attorney Larry Sonsini also said Tuesday that some general terms of potential pay plans were floated but not the specific amounts referred to by Hewlett, and whatever was put forth was ultimately rejected. <br> <br> In hopes of proving that wrong, Hewlett released minutes from two compensation committee meetings in September and a Sept. 4 ``side letter&#39;&#39; from Sonsini to a Compaq attorney, with several pages detailing the plans Hewlett described. <br> <br> Although the memos include specific numbers, including estimates of the value of stock options for Fiorina and Capellas, Sonsini said Thursday those amounts were essentially meaningless because the board had not agreed on how the options should be priced. <br> <br> ``The fact of the matter is, there are no terms, no agreements and no understandings in place,&#39;&#39; he said. <br> <br> Compaq&#39;s board also released a statement saying Hewlett had raised ``a non-issue about agreements that don&#39;t exist.&#39;&#39; <br> <br> HP shares rose 9 cents to $20.12 on the New York Stock Exchange, where Compaq stock fell 6 cents to $10.14.

http://accesswdun.com/article/2002/3/198112