Please see a correction to this post based on an error by HP.
Late yesterday, Hewlett-Packard (HPQ) released its proxy. First, there’s the numbers on CEO Mark Hurd’s pay, which have been well-reported, but which illustrate just how screwed up the compensation disclosure rule really is. Reuters reports Hurd’s total comp at $42 million; the AP has it at $34 million and the board’s own calculations — called the committee’s view in the proxy — have it at $23.3 million. Sounds like something for Mary Schapiro’s to-do list once she is confirmed.
Still, we were much more fascinated by the tax-gross up chart on pg. 47, which showed that Hurd received “an other gross up” of $79,814, and the equally delicious footnote which explained that that money “represents amounts reimbursed to the NEOs for taxes on meals associated with business travel undertaken by the NEOs in connection with events to which family members were invited.”
Now, calculating an expense from a gross-up is a bit of an inexact science since we can only guess at Hurd’s tax rate. And, presumably those meals were eaten in different places where the local tax rate varies, which further complicates the calculation. Still, the experts that I’ve consulted with say a conservative estimate would be around $160K in food for Hurd’s family and that it’s probably significantly higher than that. Any footnoted readers care to come up with a better calculation?
UPDATE: We’ve done a bit more back-of-the envelope math based on the disclosure for Hurd’s airplane gross-up and are coming up with roughly $243K in food, which as one sage footnoted reader jokes, “that’s a lot of black and white cookies!”
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