HP pay body members say Walter Hewlett gave deliberately misleading statements
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PALO ALTO, Calif (AFX) - Two members of the Hewlett-Packard Co board of directors' Compensation Committee accused Walter Hewlett of mischaracterising the role of the compensation committee, of which he is also a member.
"You have deliberately made misleading statements to the public," Phil Condit and Sam Ginn said in a open letter to Hewlett.
"At a time when shareowners should expect transparent and reliable disclosure from public companies, your behavior is extremely suspect and unacceptable," they said.
Condit and Ginn said Hewlett is not acknowledging that the three of them had agreed, at the last compensation committee meeting, that executive employments terms discussed at previous meetings were specifically rejected, and will not be used as a benchmark or minimum terms for any future employment arrangements following the merger.
"You assert that HP is under an obligation to negotiate employment agreements when you know it is not," the two committee members said.
Condit and Ginn said the three of them agreed that it is in the best interests of shareowners if the board of directors of the combined HP/Compaq determine appropriate compensation terms for the executive officers of the combined company.
To that end, new market data and input from independent compensation consultants has been requested, they said.
Condit and Ginn said the committee and the board have the final word on all executive compensation matters, and they added that Hewlett is fully aware that the committee has overtly rejected the executive employment terms previously discussed.
Therefore, until the committee and the board approve executive employment terms, no agreements or arrangements exist.
Hewlett had cited Section 5.12(c) of the Merger Agreement, saying HP was obligated to make previously discussed terms a benchmark in future negotiations.
Condit and Ginn cited Section 8.5 of the Merger Agreement as negating that, claiming the former regulation does not in any way obligate HP to "consider, negotiate, offer or agree to any specific terms or consider any terms as benchmarks for future terms".
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