From today's WSJ. Sorry guys, but I find it laughable that the company could say with a straight face that they awarded Pfeiffer a bonus because of 'the financial community's confidence in Mr. Pfeiffer's leadership'... That community is certainly reflecting
'it's confidence' by voting on CPQ's current stock price....
John
Compaq Cuts Executives' Options
After Operating Profit Fell 71%
By GARY MCWILLIAMS
Staff Reporter of THE WALL STREET JOURNAL
HOUSTON -- The board of Compaq Computer Corp., which saw
operating profit tumble 71% in 1998, slashed the number of stock
options awarded to its top executives.
Chief Executive Eckhard Pfeiffer received
options for 875,000 shares, down from 1.75
million share-options in 1997, according to
a company filing with the Securities and
Exchange Commission. Historically,
executive compensation at the world's
largest personal-computer maker is
composed largely of stock awards.
In 1998, Mr. Pfeiffer's total compensation,
including the value of options, fell to $23.3
million from $46.3 million a year earlier. His
$4.48 million in salary and bonus was down
slightly from the year earlier.
Despite the reduction in stock options, the board's
human-resources committee, using the same language as in its
1997 report, credited Mr. Pfeiffer for "continued significant steps
in Compaq's transition from a PC company to a computer
company." It said his bonus also was a result of the "industry and
financial community's confidence in Mr. Pfeiffer's leadership."
The board's review of the company's revenue growth and return
on invested capital noted it had fallen below most of its peers last
year, compared with 1997, when it outperformed nearly 80% of
its peer group.
Mr. Pfeiffer's top lieutenants, Earl L.
Mason, senior vice president and chief
financial officer, and John T. Rose,
senior vice president for enterprise
computing, also saw their salaries and
bonuses flatten and option awards more than halved. Both Mr.
Mason and Mr. Rose received options for 300,000 shares, down
from 650,000 shares a year earlier. Each saw his total
compensation, including value of options, fall to $7.4 million, from
$16.4 million a year ago.
Compaq's 1998 revenue rose to $31.16 billion, from $24.58
billion, largely as a result of its June acquisition of Digital
Equipment Corp. The company's profit from operations, however,
fell to $857 million, compared with operating profit of $3 billion in
1997, as a result of acquisition-related expenses and turmoil in
its PC operations. Compaq's PC business was hobbled for much
of the year as a result overloading its dealers in late 1997. During
1998, Compaq was forced to provide sales incentives and cut
back on dealer shipments to reduce the glut.
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