HP CEO Gets Severance Bump in Event He’s Fired in Xerox Takeover

(Bloomberg) -- HP Inc. has increased by about 50% the payout its chief executive officer will get if he’s fired in a hostile takeover by Xerox Holdings Inc. or any other kind of change of control.

HP has changed the formula for calculating Enrique Lores’s severance package if he is terminated under such circumstances, the company said in a March 5 filing. The changes were made just one week after the original severance terms were disclosed in HP’s preliminary proxy statement on Feb. 27.

Under the new formula, Lores stands to make about $7.2 million in severance if he is fired as the result of a change of control, according to calculations by Bloomberg. That compares with about $4.9 million under the previous plan, they show.

The key difference is that Lores would receive double his current salary and projected bonus this year, his first as CEO. Previously, his severance was based on his salary and the average of his bonus over the past three years, which would have included his time as president of Imaging and Printing Solutions when he earned considerably less, the filing shows. The changes to severance would impact other executives at the company as well.

“This is a usual structure applicable to any recently appointed HP executive, including Mr. Lores who was recently appointed CEO,” the Palo Alto, California-based company said in an email.

A representative for Xerox declined to comment.

Xerox has offered to acquire the much larger HP for $24 a share in cash and stock, or about $35 billion. HP has repeatedly rebuffed Xerox’s overtures, arguing the proposals have undervalued the personal computer giant. Lores has said his concerns include the value exchange, capital structure and synergies involved in a deal.

The two sides are expected to meet this week to discuss those issues, and potentially determine whether a business combination would be possible.

--With assistance from Anders Melin.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew Monks

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