Meg Whitman’s $1 salary at Hewlett-Packard isn’t the whole story

Meg Whitman is taking a $1 annual salary for her position as the new chief executive of Hewlett-Packard Co. But don’t think she’s working for peanuts.

As part of her compensation package, Whitman was also awarded options to buy nearly 2 million shares of HP stock at $23.59, close to Friday’s opening price, which eventually could bring her a windfall of tens of millions of dollars if HP’s stock price rises. But as with many executive-level packages, the options won’t vest immediately: Whitman won’t be able to cash in at least 900,000 of them until a year from now.

The vesting of the options is also tied to the performance of the stock: If HP’s stock doesn’t achieve certain levels of growth during her tenure, in other words, Whitman can’t use them.

Or can she? A look at recently sacked CEO Leo Apotheker’s severance agreement shows that a fired executive can still reap huge stock payouts, even if he’s terminated for lackluster performance.

Apotheker, who presided over a nearly 40% decline in the price of HP stock, is walking away with a $7.2-million cash severance, as well as a $2.4-million annual bonus and $3.5 million in stocks. But he might also reap a windfall of another 425,000 shares, provided the company does well ... under Whitman.

[email protected]