Hewlett-Packard Opens Its Wallet

Hewlett-Packard  (NYSE: HPQ  ) is giving CEO Meg Whitman a hefty pay raise, boosting her base cash salary from a nominal $1 to a whopping $1.5 million. When Whitman came on as CEO, she agreed to the symbolic $1 annual salary as signifying her commitment to Hewlett-Packard's turnaround. By accepting her compensation entirely in the form of equity over the past two years, her interests would be aligned with shareholders.

Whitman's 2011 compensation package was valued at nearly $16.5 million while her 2012 payout was $15.4 million. That's effectively all equity and with HP shares up more than 80% this year, Whitman's doing just fine. More importantly, she has made meaningful progress in the company's turnaround. HP has strengthened its balance sheet by paying down debt, and the product strategy has been streamlined while also diversifying operating system platforms.

In this segment of Tech Teardown, Erin Kennedy discusses Meg Whitman's new paycheck with Evan Niu, CFA, our tech and telecom bureau chief.

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