Hewlett Packard (HP) and Compaq plan to award golden handcuffs worth £438m ($634m) to key employees if the merger goes through, the companies disclosed yesterday.
HP will pay bonuses totalling £23m ($33.1m) to 10 top executives, and £233m ($337m) to about 6,000 selected employees over two years, according to an updated merger prospectus filed with the Securities and Exchange Commission.
Compaq, meanwhile, says it will pay £15.4m ($22.4m) to seven top executives and £167m ($242m) to an undisclosed number of employees over two years. The company also said it will donate £8.2m to charity in the names of its outside directors.
The pair said that the chief executives wanted to avoid the appearance of conflicts of interest as they urge on the deal's completion. The retention bonuses are designed to keep important employees around during the difficult integration of the massive technology companies.
HP has 86,000 workers and Compaq employs 66,500 around the world. But at least 15,000 layoffs are expected if the deal does take place.
Both companies disclosed in their original prospectus in November that HP chief executive Carly Fiorina had turned down a merger related bonus package that would have been worth £5.5m ($8m), and that Compaq chief executive Michael Capellas forfeited a £9.9m ($14.4m) plan.
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