HP (HPQ) May Oust Apotheker; Here's What He'll Miss

Hewlett-Packard (NYSE: HPQ) shares have surged late Wednesday morning following headlines its Board might be considering an ouster of CEO Leo Apotheker. The move seems unusual -- Leo still has that "new car" smell -- but recent stock performance might make for a worthy argument.

Former eBay (Nasdaq: EBAY) CEO, and once California rep hopeful, Meg Whitman, is said to be a potential candidate for the position.

Here's what Apotheker is going to miss out on, should he be removed before October 31, 2011:

• He'll need to repay $1,777,776 as pro-rata of his $4 million signing bonus;
  
  
• No potential to get 40,000 restricted shares, set to be released on October 31, 2011;
  
  
• He had an annual target bonus of 200 percent of base salary, which is $1.2 million, with a maximum annual incentive of 500 percent of base for 2011. From an SEC filing: "The first-year annual bonus is minimally guaranteed based on target-level performance."

Other awards include:

• 76,000 shares of restricted stock, with the restrictions to be released on 50% of the shares on October 31, 2011, and as to the remaining shares on October 31, 2012, assuming Apotheker’s continued employment.
  
  
• 304,000 performance-based restricted units, with respect to the three-year performance period November 1, 2009 to October 31, 2012; but as to which Apotheker shall only be eligible to participate based on his actual period of service on and after November 1, 2010.
  
  
• 304,000 PRUs for the period November 1, 2010 to October 31, 2013, with performance on the cash-flow metric deemed to have been achieved for the first year.

Whether the Board will have to pay for termination "without cause" is another matter, and opens up a whole world of bonuses and severance for Apotheker.

HP shares last traded at $24.03, up 7.1 percent from Tuesday's closing price.

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