Hewlett-Packard CEO Meg Whitman, in the middle of a multiyear effort to remake the giant tech vendor, is getting a significant pay raise.
When Whitman took over as president and CEO in September 2011, she said she would take an annual salary of $1. Granted, stock options and bonuses helped boost what she took home in 2012 to more than $15 million, but the $1 base pay was a gesture to show how seriously Whitman took HP's financial situation, which included several quarters of falling stock prices.
In a filing this month with the Securities and Exchange Commission (SEC), HP's board of directors said Whitman's annual base pay would jump from $1 to $1.5 million "to bring Ms. Whitman's salary to a competitive level among the salaries of the chief executive officers of HP's peer companies."
The pay increase took effect Nov. 1.
Whitman had been on the company's board of directors until replacing Leo Apotheker, who held onto the CEO title for less than a year after taking over for Mark Hurd. At the time of Whitman's ascension, HP had been battered by executive turnover, constantly changing corporate strategies—like Apotheker's announcement that he wanted to rid HP of its PC business—questionable acquisitions (Autonomy and EDS) and market forces that include a dramatic decline in global PC shipments.
In 2012, Whitman outlined a five-year plan to restructure the company and return it to consistent profitability. The strategy included shedding 29,000 jobs over several years. The CEO this year has said she is pleased with progress at HP, telling analysts in October that greater stabilization is coming in 2014 with "pockets of growth," followed by the business gaining steam in 2015 and becoming "in fiscal 2016, an industry-leading company."
Despite HP's many challenges, the market seems to be responding to what Whitman is advocating, with its stock price reportedly rising 93 percent this year.
In the calendar third quarter, HP saw revenues of $29.1 billion, a 3 percent drop over the same period in 2012, and income of $1.4 billion, a jump over the $8.9 billion loss in the third quarter last year, when the company was hit with an $8.8 billion charge against its acquisition of software maker Autonomy. When talking with analysts and journalists about the numbers, Whitman said progress is being made, but there are still significant challenges that HP will have to deal with, from global economic forces and mobility to go-to-market strategies and competition from the likes of Dell and Cisco Systems.