1/4/2015 HP CEO Meg Whitman will get a monstrous payout if she's ever fired - Yahoo Finance

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ˠ ➕ ✕ By Julie Bort

12 hours ago

HP CEO Meg Whitmanwill get a monstrouspayout if she's ever fired

(Flickr/HP/HP Deutschland)HP Enterprise CEO Meg WhitmanMeg

Whitman is one of the most generously compensated CEOs

compared to most of her peers, according to a new report from

UBS analyst Steven Milunovich.

She's especially paid better than one of her direct competitors,

IBM CEO Ginni Rometty.

"In considering CEO compensation relative to market cap, the

heads of Nimble, 3D Systems, and HP are better paid while IBM's

Rometty is underpaid albeit following a couple difficult years,"

Milunovich wrote.

One of the things making Whitman's compensation package so

sweet: a huge golden parachute.

Whitman would get nearly $91 million if HP gets acquired – more

than double her peers – and $51 million if she's forced out (not

fired for cause) – again, nearly double.

That compares to zip that Tim Cook gets in either situation and $0

for Rometty for an acquisition, or $14.6 million if she's terminated.

Here's the charts:

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(USB)

(USB)

Calculating bonuses

(Business Insider/Julie Bort)IBM CEO Ginni RomettyIt's also

interesting what these CEOs and their executive teams need to do

to get a bonus.

Whitman and team's cash bonus is weighted more towards cash

flow than to improving revenue. The stock bonus is based on profit

and stock performance (50/50), Milunovich reports. So she does

well if she controls costs, even if she doesn't grow the top line.

IBM's Rometty and her team's cash bonus is "more dependent on

profit and cash flow than on revenue," Milunovich writes. "We

would like to see a bit more weight on revenue ... We've argued

that IBM could use more of a growth mentality and should shrink in

order to grow."

Where revenue is factored in, it's weighted toward growing

revenue in IBM's "strategic" initiatives, the new areas that IBM is

investing in that replace its older, shrinking business units. And for

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stock bonuses for IBM, its 70% profit and 30% cash flow. Again,

IBM executives do well if they control costs.

In comparison, Apple, which recently posted the best quarter of

any company ever, requires Cook and crew to perform equally

well on revenue growth and profit for a cash bonus (weighted

50/50). Stock bonuses are based entirely on stock performance.

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