ORACLE HAS offered its new co-president, former Hewlett-Packard chief Mark Hurd, a hiring package with a bonus of up to $10 million (€7.8 million) and share options potentially worth tens of millions more.
Oracle, the world’s third-largest software maker, named Mr Hurd (53) as co-president on Monday, a month after he stepped down from HP because of a scandal involving expense reports and a female contractor.
According to the offer letter, filed this week with the US Securities and Exchange Commission, Oracle is offering Mr Hurd a starting annual base salary of $950,000 and a bonus of as much as $10 million, plus options to buy 10 million Oracle common shares after the next board meeting.
Fred Whittlesey, an executive compensation consultant with the Hay Group, said it was difficult to estimate the value of stock options because no one knows where Oracle’s share price may go in the future.
Using the valuation of options disclosed by Oracle in its most recent annual report, Mr Whittlesey estimated Mr Hurd’s hiring package to be worth about $72 million, with $66 million of that in options that vest over four years.
That estimate, which Mr Whittlesey called “theoretical” and based on accounting rules, would only be realised after four years of service from Mr Hurd and Oracle shares rising to $30.60.
The shares were trading at $24.35 in morning trading in New York yesterday.
Mr Whittlesey said it was normal for a new executive such as Mr Hurd to have a hiring package larger than what he would receive in future years. Mr Hurd’s offer letter also included a grant to buy an additional five million Oracle common shares each year for the next five years.
At HP, Mr Hurd was one of the technology sector’s best-paid chief executives. He took home roughly $98 million in total compensation from HP over the past three years, including $30 million in its 2009 financial year.
Safra Catz, who shares the president role with Mr Hurd at Oracle, had total compensation of $36.4 million in the 2010 financial statement, ended May 31st, according to the company’s official filings.
On Tuesday, HP sued Mr Hurd, asking a California court to block him from taking a job with a rival to which he could reveal HP trade secrets. Oracle and HP compete in the server computer market.
Mr Hurd walked away from HP with an exit package worth an estimated $34.6 million, including a severance payment of $12.2 million and restricted stock.
At Oracle, Mr Hurd will be responsible for sales and marketing, consulting and Oracle’s global business units, according to a document Oracle filed with the SEC earlier this week.
HP is one of the largest private sector employers in Ireland with more than 4,000 staff at operations in Leixlip, Co Kildare, Dublin and Galway. – (Reuters)
