Software maker Oracle said it will pay former Hewlett-Packard chief executive Mark Hurd $950,000 a year in salary as president, with a bonus of as much as $10 million.
Mr Hurd's target bonus for fiscal 2011 is $5 million, which may be higher if he exceeds performance targets, Oracle said in a regulatory filing. He also gets the option to purchase 10 million shares of the company's stock at the market price on the date of the grant, allowing him to profit as the stock rises.
Hewlett-Packard filed a lawsuit yesterday to stop Mr Hurd from working at Oracle. Mr Hurd signed several non-disclosure agreements while at HP and it would be impossible for him to work as president at Oracle without disclosing HP trade secrets and confidential information, the company said in its complaint.
Mr Hurd left HP August 6th after the company said he violated standards of business conduct. As part of his severance, Mr Hurd was due to receive a payment of $12.2 million, plus other benefits that include restricted HP shares.
All told, Mr Hurd may receive $40 million to $50 million, according to an estimate by Frank Glassner, chief executive of Veritas Executive Compensation Consultants LLC in San Francisco.
Oracle chief executive Larry Ellison in a statement called the HP lawsuit "vindictive" and said it would make it more difficult for the two companies to work together.
In his new position at Oracle, Hurd would report to Ellison and lead sales, consulting, marketing and customer support at Oracle. The software maker has increased sales through a string of acquisitions that widened the company's portfolio and added customers.
Mr Hurd will also receive the option to buy 5 million additional shares a year for the next five years as part of Oracle's company-wide employee stock option grants.
Oracle rose $1.35, or 5.9 per cent, to $24.27 in Nasdaq Stock Market trading yesterday, after the announcement about Hurd joining the company. The shares had declined 1.1 per cent this year before today.
Bloomberg