* Offered $950,000 salary, bonus up to $10 million
* Option for 10 million shares
* Could be worth much more-consultant (Adds estimate of pay package, changes dateline, previous NEW YORK)
By Gabriel Madway and Liana B. Baker
SAN FRANCISCO/NEW YORK, Sept 8 (Reuters) - Oracle Corp ORCL.O has offered its new co-president, former Hewlett-Packard (HPQ.N) chief Mark Hurd, a hiring package with a bonus of up to $10 million and options potentially worth tens of millions more.
Oracle, the world’s No. 3 software maker, named Hurd co-president on Monday, a month after he stepped down from HP because of a scandal involving expense reports and a female contractor. [ID:nN06144965].
According to the offer letter, filed on Wednesday with the U.S. Securities and Exchange Commission (SEC), Oracle is offering Hurd a starting annual base salary of $950,000 and a bonus of as much as $10 million, plus options to purchase 10 million Oracle common shares after the next board meeting.
Fred Whittlesey, an executive compensation consultant with the Hay Group, said it was difficult to estimate the value of stock options because no one knows where Oracle’s share price may go in the future. He said a rough rule of thumb holds that an option has an accounting value worth around one-third of its face value.
Using the valuation of options disclosed by Oracle in its most recent annual report, Whittlesey estimated Hurd’s hiring package to be worth about $72 million, with $66 million of that in options that vest over four years.
That estimate, which Whittlesey called “theoretical,” is based on four years of service from Hurd and Oracle shares rising to $30.60. Oracle shares closed at $24.14 on Wednesday.
Whittlesey said it was normal for a new executive such as Hurd to have a hiring package larger than what he will receive in future years.
Hurd’s offer letter also included a grant to buy an additional 5 million Oracle common shares each year for the next five years.
At HP, Hurd was one of the technology sector’s most well-paid chief executives. He took home roughly $98 million in total compensation from HP over the past three years, including $30 million in fiscal 2009.
Safra Catz, who shares the president role with Hurd at Oracle, had total compensation of $36.4 million in fiscal 2010, ended May 31, according to the company’s proxy statement.
On Tuesday, HP sued Hurd, asking a California court to block him from taking a job with a rival to which he could reveal HP trade secrets. Oracle and HP compete in the server computer market. [ID:nN07242144]
Hurd walked away from HP with an exit package worth an estimated $34.6 million, including a severance payment of $12.2 million and restricted stock.
At Oracle, the 53-year-old Hurd will be responsible for sales and marketing, consulting and Oracle’s global business units, according to a document Oracle filed with the SEC on Sept. 8.
Oracle shares closed down 0.5 percent at $24.14 on Nasdaq. (Reporting by Gabriel Madway in San Francisco, Liana B. Baker in New York and S. John Tilak in Bangalore; Editing by Vyas Mohan, John Wallace, Steve Orlofsky, Gary Hill)