Ken writes:

> 4:14PM  H-P files definitive proxy with SEC (HWP) by Leticia Williams
>  Hewlett-Packard (HWP) filed proxy materials for the company's April 26
>  annual shareholder meeting with the Securities and Exchange Commission
>  Thursday. According to the filing, the company paid auditor Ernst & Young
>  $23 million for services rendered in fiscal 2001. Ernst & Young billed $3.7
>  million in auditor fees, and $19.3 million in other fees, which included
>  statutory audits, services related to business acquisitions, consultations
>  and tax services, the filing said. The proxy also detailed compensation
>  previously released in the H-P annual report. CEO Carly Fiorina received a
>  grant for 1 million stock options, valued at $13 million, along with a $1
>  million salary and no bonus for fiscal 2001. H-P's shares closed at $17.25,
>  down 12 cents.

Next year's reported acquisition expenses will be a bit higher. What are
being called "post-merger retention bonuses" that will be given out if the
merger is successfully voted for were detailed in an SEC filing on January 14
as being:

Total to ten top HP executives:  $33.1 million
Total to 6,000 selected HP employees:  $337 million
Total to seven top Compaq executives:  $22.4 million
Total to an undisclosed number of Compaq employees:  $242 million

The "post merger retention bonuses" are not insignificant, averaging $50,0000
per recipient. Six thousand targetted employees is more than enough to cover
every middle manager at HP. However, the top ten HP executives will receive
on average $3.3 million dollars, approx. 60 times as much.

In regard to the "bonuses", BusinessWeek reported the following on the day of
vote:

=======================================

Some may also be worried about their retention bonuses. One insider admits
that he'll vote his personal shares for the deal, even though he doesn't
think it's best for the company. The reason: He's one of 6,000 HP employees
getting hefty retention bonuses -- $337 million in all -- if he stays with
the post-merger company. "I know it's pathetic, but the old HP is gone," he
says. "I'm giving up on the stock, and taking the cash. The bribe worked."

=======================================

The cost of HP's massive proxy vote campaign has similarly been estimated to
be between $120 to 150 million dollars. These summed costs alone total more
than three-quarters of a billion dollars. This is apparently money that
unlike the stock swap (which is to a degree play money) that will come
directly -- and relatively immediately -- out of HP's coffers.

Walter Hewlett also disclosed during the proxy battle that Fiorina is slated
to receive an additional $50 million dollars (in stock, I presume) as a
result of a successful merger.

The tenor of the times certainly seems to be "get what you can get while the
getting's good."

Wirt Atmar

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