Hewlett: HP Mulled High Pay For Fiorina, Capellas

Hewlett, who opposes the proposed merger, said in a statement that the HP compensation committee, of which he is a member, had also considered a two-year package worth $47.6 million for Compaq chief Michael Capellas, who would be the No. 2 executive in the merged firm.

The committee has delayed finishing negotiations until after the $21 billion merger is completed, but Hewlett said he had attempted to persuade HP to disclose the terms of the packages under consideration for the executives, who have declined merger retention bonuses in widely publicized acts of good faith.

Hewlett charged HP management with using outside lawyers to pressure him into keeping the proposed compensation secret, but argued that it was vital information for investors considering the merger, especially since Capellas and Fiorina had declined to take the retention bonuses.

A spokeswoman for HP said the company would respond to Hewlett in a statement soon.

The proposed two-year package considered for Fiorina included an annual salary of $1.6 million, a target annual bonus of $4.8 million and 6 million stock options with a "total estimated current value" of $57 million, Hewlett said.

By comparison, HP reported that Fiorina received $1 million salary and $13.5 million worth of stock options in 2001. She did not receive a bonus, due to HP's performance, although her 2000 bonus was $1.76 million.

The package considered for Capellas was an annual salary of $1 million, a target annual bonus of $3.8 million and 4 million stock options with a current value of $38 million, Hewlett said.

Hewlett said that the proposals were detailed and that HP would be bound by the merger agreement to use them as a benchmark in future talks.

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