San Francisco/New York: Oracle Corp has offered its new co-president, former Hewlett-Packard chief Mark Hurd, a hiring package with a bonus of up to $ 10 million and options potentially worth tens of millions more.
Oracle, the world's No. 3 software maker, named Hurd 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 on Wednesday with the US Securities and Exchange Commission (SEC), Oracle is offering Hurd a starting annual base salary of $ 950,000 and a bonus of as much as $ 10 million, plus options to purchase 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, Whittlesey estimated 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 Whittlesey called "theoretical" and based on accounting rules, would only be realized after four years of service from Hurd and Oracle shares rising to $ 30.60.
Whittlesey said it was normal for a new executive such as Hurd to have a hiring package larger than what he will receive in future years.
Hurd's offer letter also included a grant to buy an additional 5 million Oracle common shares each year for the next five years.
At HP, Hurd was one of the technology sector's most well-paid chief executives. He took home roughly $ 98 million in total compensation from HP over the past three years, including $ 30 million in fiscal 2009.
Safra Catz, who shares the president role with Hurd at Oracle, had total compensation of $ 36.4 million in fiscal 2010, ended May 31, according to the company's proxy statement.
On Tuesday, HP sued 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.
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, the 53-year-old Hurd will be responsible for sales and marketing, consulting and Oracle's global business units, according to a document Oracle filed with the SEC on September 8.
Oracle shares closed down 0.5 percent at $ 24.14 on Nasdaq.(This story has not been edited by News18 staff and is published from a syndicated news agency feed)