27 February 2002 The CEOs of Hewlett-Packard (HP) and Compaq Computer will earn an estimated $115 million (€132.4m) under a new pay structure to be introduced should their two companies merge, a key opponent to the deal has claimed.

HP board member and son of HP co-founder William Hewlett, Walter Hewlett, said in a filing to the Securities and Exchange Commission (SEC), the US financial markets regulator, that HP’s Carly Fiorina and Compaq’s Michael Capellas will enrich themselves by tens of millions of dollars under a secret post-deal compensation package.

Both HP and Compaq denied that new post-deal employment contracts had been struck.

Hewlett’s SEC filing comes less than three weeks before HP and Compaq shareholders are due to vote on the controversial $22 billion (€25.3bn) deal. The crucial vote, which observers say could be close, is expected to take place on 19 March 2002.

According to Hewlett, Fiorina’s post-deal employment contract will give her an annual base salary of $1.6 million (€1.8m), an annual bonus targeted at $4.8 million (€5.5m) and six million share options with a total estimated current value of some $57 million (€65.6m).

But a spokeswoman for Fiorina, who is expected to quit HP if the vote goes against her, told The Wall Street Journal that Hewlett’s claims were “bizarre”, adding: “There are no assurances that she will be awarded as attractive a compensation package after the merger is completed.”

According to Hewlett, Capellas will be given an annual base salary of $1 million (€1.2m), an annual bonus targeted at $3.8 million (€4.4m) and four million share options currently valued at about $38 million (€44m).

A Compaq spokesman said the company would not negotiate pay contracts before the vote.