This excerpt taken from the HPQ DEF 14A filed Jan 23, 2007.
6Link Pay to Performance
RESOLVED: Shareholders request the Board of Directors adopt a long-term policy that a significant portion of future long-term equity compensation to senior executives shall be performance-based, i e., linked to demonstrable performance criteria, measured by challenging performance targets, and using as benchmarks such criteria as Hewlett-Packards' performance compared to its peers and a broader market standard.
Mr. William Steiner, 112 Abbottsford Gate, Piermont, NY 10968 sponsors this proposal.
The Corporate Library (TCL), an independent investment research firm in Portland, Maine expressed concern about executive pay not linked to demonstrable
performance criteria at H-P. TCL said H-P executive compensation was a "Very High Concern" category:
TCL also said that Performance-Based CEO Compensation is a key indicator of board independence. Additionally Mr. Mark Hurd, H-P Chairman and CEO, had annual pay of $23 million according to TCL.
Our Board Has a History of Over-Paying
On February 8, 2005 our Board ousted our Chairperson Carleton Fiorina. Our board shoulders much of the blame for both Ms. Fiorina's pay and her failure. Our board delivered excess pay to Ms. Fiorina in the beginning, front-loaded, with a massive value not related to performance.
Ms. Fiorina received almost $180 million in pay during her tenure, including a $21 million severance.
Our Board approved the pay in question, including the "golden hello," the excess base salary the substantial stock option awards and the excessive severance package. None of these were properly tied to performance; indeed most were completely independent of it.
Text of the above three paragraphs based on a 2005 report from The Corporate Library
I believe that our Board of Directors should adopt a more rigorous standard for senior executives' incentive payone that considers both our company's performance and also how that performance compares to its peers and the broader market.