SAN FRANCISCO (AP) — Hewlett-Packard CEO Meg Whitman is getting a huge raise as she enters the third year of her attempt to turn around the slumping personal computer and printer maker.
Whitman's annual salary is soaring to $1.5 million from the $1 that she settled for during her first two years on the job, according a regulatory documents filed Tuesday. The raise approved last week is retroactive to Nov. 1, the beginning of Hewlett-Packard Co.'s fiscal year.
HP said the bigger paycheck will make Whiteman's salary comparable to what CEOs of similar-sized companies make. HP earned $5 billion on revenue of $112 billion during its last fiscal year.
The Palo Alto, Calif., company's annual revenue has fallen by 12 percent over the past two years as PC sales have declined amid a shift to smartphones and tablets. Whitman has been trying to counter the downturn by expanding into more profitable niches such as business software, data analysis and technology-consulting services.
Whitman is a billionaire who agreed when HP hired her as CEO in September 2011 to accept a nominal salary partly because she realized the company would have to trim its payroll to offset the drop in revenue. Not long after Whitman took control, the company set out to eliminate nearly 30,000 jobs.
HP's revenue is still falling, but the company's stock has risen by 20 percent since Whitman took over. The Standard & Poor's 500 index has climbed about 58 percent during the same period. HP's shares plunged during Whitman's first 15 months on the job, but have nearly doubled this year in a sign of increased investor confidence in her ability to get the company back on the right track.
Despite the rally, HP was dropped from the prestigious Dow Jones industrial average earlier this year, partly because its stock price remains well below where it stood just a few years ago. The shares closed Tuesday at $27.45, about 40 percent below their value in August 2010 when HP parted ways with Mark Hurd as its CEO amid questions about his relationship with a company contractor and his expense reports. Hurd is now a top executive at HP rival Oracle Corp., where he is paid an annual salary of $950,000.
Whitman could afford to forego much of the salary routinely paid to corporate CEOs. Her wealth is estimated at $1.9 billion by Forbes magazine. Most of Whitman's fortune flowed from her success running eBay Inc. during the Internet bazaar's formative years. She stepped down as eBay's CEO in 2008 and subsequently made an unsuccessful run to become California's governor.
Other billionaire CEOs who limit their salary to $1 include Google Inc.'s Larry Page and Oracle's Larry Ellison.
Despite her paltry salary, Whitman has still been richly compensated during her stint as HP CEO. Most of her pay has come in the form of stock awards designed to give her an incentive to boost HP's market value. Her initial pay packages have been valued at $15.4 million to $16.5 million, mostly because of the stock award. HP hasn't yet revealed how much stock, bonus and other perquisites that Whitman received in the last fiscal year to supplement her annual salary.
Tuesday's regulatory filing didn't discuss how Whitman's higher salary might affect the rest of her pay package for the current fiscal year.