Hewlett-Packard Co, the world's biggest technology company by sales, has tightened its severance policy for executive officers following criticism over the exit packages awarded to its last two bosses.
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The U.S. group said in a securities filing on Wednesday the changes would be effective for terminations occurring after Nov. 1, 2011.
HP attracted a flurry of criticism earlier this year after former chief executive Leo Apotheker received nearly $10 million in severance and bonuses in September. Apotheker's predecessor Mark Hurd got an exit package estimated at about $34.6 million after he was fired in August 2010.
Under the new policy, only annual bonuses, and not one-time bonuses, are included in the calculation of cash severance benefits. It also provides for severance payments to be made in periodic installments, rather than in a lump sum, with the installments subject to "continued compliance with post-employment protective covenants."
HP, which disclosed the new policy in an annual report filed with the U.S. Securities and Exchange Commission (SEC), said the new plan provided for pro-rata vesting of unvested equity awards if the executive officer has worked at least 25 percent of the applicable vesting or performance period.