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Is HP's Mark Hurd Worth $30 Million?

Tech execs are flying under the radar at a time when Washington is threatening to claw back Wall Street's eight-figure bonuses. But it's not like Silicon Valley is paying peanuts. New records show HP CEO Mark Hurd got $30 million last year. Did he earn it?
Tech execs are flying under the radar at a time when Washington is threatening to claw back Wall Street's eight-figure bonuses. But it's not like Silicon Valley is paying peanuts. New records show HP CEO Mark Hurd got $30 million last year. Did he earn it?A proxy statement filed Tuesday by HP showed that Hurd, now in his fifth year atop the PC, server, and outsourcing vendor, earned $30 million in total compensation in fiscal 2009.

Hurd's salary was a "meager" $1.27 million, but he also drew a bonus of $1.18 million, more than $10 million in stock awards, $2.5 million in option awards, $14.6 million under a "non-equity incentive plan", and more than $2 million in other perks, the records show.

Hurd's compensation, enough to purchase about 43,000 HP Pavilion DV6 laptops, actually represents a 28% pay cut from 2008, when Hurd drew total compensation of $42.37 million.

So, was Hurd worth the money, and was the compensation cut deserved? It's a mixed bag. For fiscal 2009, HP's year-over-year net revenue fell 3.2%, to $114.6 billion. Net earnings were also down, off 8% to $7.7 billion.

On the other hand, HP's stock price actually rose during its past fiscal year, which ended Oct. 31, 2009. The stock was up 24% from the previous October, to $47.46. Not a bad trick during a recession.

HP also maintained a solid grip on the server market during the period. It was the number one vendor in worldwide servers, with a 36.5% share of total unit shipments, according to IDC.

Still, $30 million seems a tad rich. IBM is HP's closest peer in terms of size and breadth of offerings, and its CEO, Sam Palmisano, had to get by with a paltry $14.3 million in total compensation in Big Blue's 2008 fiscal year (IBM has yet to report last year's numbers).

Other HP execs also made out well in 2009-though most took substantial pay cuts from 2008.

Executive VP for Enterprise Ann Livermore drew $13.4 million in total compensation (down 34% from the previous year), Personal Systems exec VP Todd Bradley earned $12.5 million (down 40%), and Imaging and Printing group chief Vyomesh Joshi bagged $11.6 million (down 47%).

CFO Catherine Lesjak actually got a 37% raise-to $7.6 million in total compensation. Maybe she's the only one of the bunch who can work an HP 12c financial calculator.

Luckily for Hurd and his executive team, Hewlett-Packard's Palo Alto headquarters is a full 2,429 miles from the grasping hands of Timothy Geithner's D.C. treasury. Wall Street is much, much closer.

Update @3:20 p.m.: HP reps point out that Hurd's compensation for fiscal 2009 was in part based on his performance over the past three years.

"HP sets a high hurdle for its executive compensation plans based on the company's short- and long-term business results. This pay-for-performance culture tightly aligns HP with the interests of our shareholders," a spokesman said.