Meg Whitman's payday for first year at HP: US$15 mil.

It's a big payday even by the lofty standards of big-time CEOs. The chief executives of major public companies made a median of US$9.6 million in 2011, the most recent year available, according to executive pay research firm Equilar.

But Whitman's US$15.4 million pay package takes an unusual formula, one that she hopes will inspire confidence that she is serious about turning around the ailing computer company. For the second year in a row, she will receive just US$1 in salary. She will also receive a US$1.7 million bonus and about US$220,000 worth of perks, almost all of that related to use of company airplanes.

The bulk of her pay, though, is tied to the company's performance. She is to receive US$7 million in stock awards and US$6.4 million in option awards. Options are the right to buy shares in the future at the price they're trading at when the options are granted, so they're worth something only if the shares go up.

Whitman became CEO in September 2011, just before the end of the 2011 fiscal year. For that year, she was paid US$16.5 million, but almost all of it was in option awards that haven't yet vested.

Shareholders will be allowed to vote on whether they approve the pay packages for Whitman and for other top executives when the company holds its annual meeting March 20 in Mountain View, California. The vote is only advisory, meaning the company doesn't have to follow it. But a “no” vote would be an embarrassing mark on HP's public image. In 2011, before Whitman ran the company, shareholders rejected HP's executive pay plans, which forced the company to revamp its old pay formula and tie it more closely to company performance.

Shareholders gained another victory with this report. HP is recommending that shareholders vote for a proposal that would give some shareholders the right to nominate their own candidates for the board of directors, something that certain shareholders had been pushing for.

The 2012 fiscal year, which ended Oct. 31, was one riddled with problems. HP had to take a massive write-down on the value of a British software business it had bought, Autonomy, and faces shareholder lawsuits and government investigations over Autonomy's accounting practices. HP lost nearly US$13 billion for the fiscal year, revenue slipped, and the shares lost nearly half of their value, falling to US$13.85 from US$26.61.

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