Hurd to take $950,000 salary after Oracle pay cut
Shares and $10m bonus topper upper in play
Mark Hurd will take a 25 per cent pay cut to work for Larry Ellison — if HP fails in its legal maneuver to block the Oracle CEO's audacious hire.
Ellison has offered HP's former chief a salary of $950,000 as an Oracle president and board member — stratospheric by mortal standards, but down from Hurd's $1.27m take at HP.
Hurd can top-up, though, according to an Oracle SEC filing. He's eligible for a 2011 bonus of between $5m and up to $10m, plus he'll get 10,000 shares on joining, with a further 5,000 each year for the next five years, and with the ability to vest 25 per cent the following year.
That would give Hurd an additional $60,000 a year from now, should he cash in a quarter of his joining stock allocation based on Oracle's current share price.
Hurd would lead Oracle's worldwide sales, consulting, marketing, and support in return for this package. He takes over from outgoing co-president Charles Phillips.
Despite earning less than at HP, Hurd could still afford to get by, as he's expected to receive $40m in severance from HP.
While crazy money, such compensation is sane in the world of Oracle's management — if you slip on your reality-distortion goggles.
Ellison, the tech industry's best-remunerated chief executive and one of the best-rewarded in corporate America, last year pulled in a salary of $1m according to Forbes' annual tracking service. With options and other perks, Ellison was awarded $56.8m. It's a package structure that has caused some shareholder outrages in years past.
His remaining co-president, Safra Catz, is reported to be paid a salary of $800,000, with a performance-related bonus of $3.9m and options worth $31.7m.
Whether Hurd actually sees any of the money is now contingent on a California court, as HP is litigating to stop him from working for Oracle, saying he'd reveal trade secrets and confidential company information.
HP seems to be resting its case on the US doctrine of inevitable disclosure that's used by employers to enforce the non-disclosure clauses in an employee's contract. The doctrine states that no matter what, a former employee would use or reveal secrets from their previous employer either consciously or subconsciously in the course of their work.
HP and Oracle have a long-standing history of partnership on hardware and software, which was all cool and groovy until Oracle decided it could also do hardware by buying Sun Microsystems' servers and storage business. While Oracle is going after IBM, HP clearly feels Hurd can use his knowledge of its business to beat HP in competitive bids — to open and close deals with customers — and in terms of product development, sales, and marketing.
Unfortunately for HP, California courts have rejected the inevitable disclosure doctrine, finding that it would restrict employee mobility by creating an after-the-fact covenant. ®