Apotheker's pay package shows HP confidence

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Leo Apotheker may yet have to prove that he can run a company the size of Hewlett-Packard, but his compensation package is on par with his predecessor.

According to an HP document filed with the U.S. Securities and Exchange Commission, Apotheker will earn an annual salary of $1.2 million, the same earned by Mark Hurd, who recently resigned from HP after allegations of sexual harassment.

Apotheker, whose tenure as SAP CEO ended in February and lasted under a year, will earn an annual incentive of between 200% and 500% of his annual salary. Stock awards and options, some of which vest over the coming years, amount to $71.8 million at Friday's stock value.

He'll also get a $4 million signing bonus and $4.6 million in moving expenses. Apotheker resides in France and will move closer to HP's headquarters in Palo Alto, California.

Hurd's total compensation in 2009 was over $30 million.

When HP announced on Thursday that it had chosen Apotheker for CEO, many industry observers were surprised.

"I think there's a sense of Leo has it all to prove as to helming a much larger company than SAP with a very wide product portfolio," said China Martens, an analyst with The 451 Group. In that sense, his compensation package seems large. "Leo's a bit of yesterday's man," she said.

The compensation package, however, shows that HP thinks Apotheker is a valuable choice, she said. The company may hope that he can bring a more international focus and a more software-centric vision to the business, she said.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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