New HP CEO will work for $1 a year

Working for just $1 a year to run one of the biggest tech companies in the world would seem at first glance to be a thankless task. Yet that is just what the newly appointed CEO and President of HP, Meg Whitman, has pledged to do. In a filing to the US Securities and Exchange Commission today, HP confirmed that Whitman would be taking a base salary of just $1 a year to be in charge of the troubled company.

In addition to her tiny base salary, Whitman will be able to purchase a total of 1.9 million shares of HP stock over an eight year period. The filing states that most of that stock can not be sold by Whitman until HP's stock rises 120 percent higher that its current price. Whitman will receive an annual bonus of $2.4 million in HP's 2012 fiscal year which could go up to 2.5 times that amount if certain "performance conditions" are met.

HP's former CEO, Leo Apotheker, was kicked to the curb by HP's board last week, less than a year after he was hired. But you shouldn't feel too bad for him. The regulatory filing states that Apotheker will get a tidy "golden parachute" severance package of $7.2 million from HP for his trouble in helping to lower its market value by $38 billion. He's also getting $3.56 million in HP stock and yet another $2.4 million bonus.

As the Wall Street Journal points out, other tech leaders, including now former Apple CEO Steve Jobs, have taken a $1 a year salary to run their companies.

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24 Comments

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KingCrimson said,
Steve Jobs worked for $1/year since coming back in 1997.

Yep, just another example of how crooked he is. This isn't a good fresh start for HP.

What kind of incentive is there for a CEO to do a good job when you can make more getting fired than by actually doing a good enough job to stay employed?

I'd even pay them $1,000,000.00 to hire me as the new HP CEO... provided that I still get all the bonuses and a few thousand shares.

Seriously, The base salary of CEO's of major corporations is just pocket money compared to their bonuses and shares. They should quit acting like they work for free.

Nexx295 said,
I'd even pay them $1,000,000.00 to hire me as the new HP CEO... provided that I still get all the bonuses and a few thousand shares.

Seriously, The base salary of CEO's of major corporations is just pocket money compared to their bonuses and shares. They should quit acting like they work for free.

They do it to beat the Income Tax (their bonuses are taxed at the Capital Gains rate of 15% as it is paid in stock).

Nexx295 said,
I'd even pay them $1,000,000.00 to hire me as the new HP CEO... provided that I still get all the bonuses and a few thousand shares.

Seriously, The base salary of CEO's of major corporations is just pocket money compared to their bonuses and shares. They should quit acting like they work for free.

The bonus counts as regular income not capital gain.... you can only count it as capital gain if you sell property or investments...

That to me is blatantly disrespecting the tax laws of the United States. Who would work for $1 and yet who could live on it?

notta said,
That to me is blatantly disrespecting the tax laws of the United States. Who would work for $1 and yet who could live on it?

she pays income tax on the bonus amount.. anyways it would probably go to her personal corporation anyways..

stop being a baby, go out and incorporate yourself if you want to pay less tax.. anyone can do it and it cost a few hundred bucks to get set up.

Lachlan said,

she pays income tax on the bonus amount.. anyways it would probably go to her personal corporation anyways..

stop being a baby, go out and incorporate yourself if you want to pay less tax.. anyone can do it and it cost a few hundred bucks to get set up.

That is the thing. She will not pay income tax but will instead just pay Capital gains of ca. 15%.

MindTrickz said,

That is the thing. She will not pay income tax but will instead just pay Capital gains of ca. 15%.

Bingo.

MindTrickz said,

That is the thing. She will not pay income tax but will instead just pay Capital gains of ca. 15%.

Yep this is the reason they do it. It isn't about anything but running around the Income Tax laws. Allowing them to have an effective tax rate that is almost as low as the poorest in the US.

Frazell Thomas said,

Yep this is the reason they do it. It isn't about anything but running around the Income Tax laws. Allowing them to have an effective tax rate that is almost as low as the poorest in the US.

It says she can buy a certain amount of stock, AND she gets a bonus of 2.4 million. That's is not a captial gain unless she invests it all in the stock. It's semantics, but . . .

It may be running around taxes, but it's not anything new. Deductions are where everyone gets out of paying their share anyway. The only fair way to do taxes is a straight percentage with no deductions.

farmeunit said,

It says she can buy a certain amount of stock, AND she gets a bonus of 2.4 million. That's is not a captial gain unless she invests it all in the stock. It's semantics, but . . .

It may be running around taxes, but it's not anything new. Deductions are where everyone gets out of paying their share anyway. The only fair way to do taxes is a straight percentage with no deductions.

Actually even THAT is not quite true.

It's not a capital gain using her bonus to purchase stock via an option.

It's only a capital gain if she SELLS the stock. That's what the GAIN is in "capital gain" assuming she sells for more than it cost.

Based on what the article says, the 2.4 mil bonus is income plain and simple. DEFERRED income to be sure, but income, which I believe is FULLY taxable.

It certainly is in Canada here...

MindTrickz said,

That is the thing. She will not pay income tax but will instead just pay Capital gains of ca. 15%.

Exactly this. These execs that do this want to make it sound like they are doing it for the company or something, or as some kind of publicity. I assure you that it's done 100% for tax evasion. This isn't a pat on the back for only wanting $1 a year type situation, this is yet another rich corporate executive trying to find loopholes to not have to pay as much in taxes.

HP's former CEO, Leo Apotheker, was kicked to the curb by HP's board last week, less than a year after he was hired. But you shouldn't feel too bad for him. The regulatory filing states that Apotheker will get a tidy "golden parachute" severance package of $7.2 million from HP for his trouble in helping to lower its market value by $38 billion. He's also getting $3.56 million in HP stock and yet another $2.4 million bonus.

This is what is wrong with capitalism. There should be laws in place to stop this from being possible. It's basically robbery.

Majesticmerc said,

This is what is wrong with capitalism. There should be laws in place to stop this from being possible. It's basically robbery.


I see no reason why the government should get involved in something that the board of a company agreed to... If they didn't like the terms, they shouldn't have agreed to it.

SojIrOu said,
Working for $1 is so last century. They should be working for at least $1.50 now.

With this inflation?? Probably more like $ 20... Lol

Old trick... It's not impressive when you get millions in perks instead of a salary.

OTOH, $1 a year is about right for Whitman. They'll get their money's worth at least...

GreyWolf said,
Old trick... It's not impressive when you get millions in perks instead of a salary.

OTOH, $1 a year is about right for Whitman. They'll get their money's worth at least...

what ev.. she turned down money.. have you in your life been offered a job and told them that you want to be payed 100 percent based just on your performance.

Lachlan said,

what ev.. she turned down money.. have you in your life been offered a job and told them that you want to be payed 100 percent based just on your performance.

Re-read what he said. Its a pure publicity move. She still gets the money just in a different way.