Hurd set for $11m pay deal at Oracle

Mark Hurd could make nearly $11m a year in his new position at Oracle, putting him back among the tech industry’s highest-paid executives following his forced resignation as head of Hewlett-Packard last month.

News of the pay deal came in the wake of a legal challenge from HP that was seen by some legal analysts as an attempt to recover some of the millions that the computer maker paid out to its former chief in a severance package.

HP’s board has faced criticism over its agreement to pay Mr Hurd a severance package valued at $35m-$40m, with the final value dependent on HP’s future stock price.

Mr Hurd was forced out after an HP investigation found he had falsified expenses linked to what it called an “inappropriate relationship” with former HP contractor Jodie Fisher.

On Tuesday, HP sued Mr Hurd in state court in California, claiming he would inevitably divulge HP’s trade secrets and a confidential agreement with the company if he takes up his new role at Oracle.

But legal experts said HP was unlikely to prevail, given the usual resistance of Californian courts to such claims.

Oracle will pay Mr Hurd an annual salary of $950,000, and has made him eligible for a bonus of up to $10m in 2011, according to a regulatory filing on Wednesday.

Mr Hurd’s target bonus for next year is $5m, but he will receive the higher amount if he exceeds certain performance targets.

The legal spat over Mr Hurd’s appointment has threatened to upset a close partnership between the tech companies which has already shown signs of fraying as they become more direct competitors. Larry Ellison, Oracle’s chief executive, called the HP suit “vindictive” and accused it of making it “virtually impossible” for the two companies to co-operate.

HP said it had no quarrel with Oracle itself, having sued Mr Hurd. “Oracle is an important partner, and HP will continue to work with them to deliver the solutions that our customers need,” the company said in a statement yesterday.

Many customers run Oracle databases on top of high-capacity HP computers, and Mr Ellison’s blunt statements hit investor sentiment.

HP shares fell as much as 3 per cent in midday trading. But even if Oracle does stop co-operating with HP, many technology consultancies will continue to bundle their products together, said analyst Dana Garder of Interarbor Solutions.

Oracle considers IBM its top database competitor, yet many Oracle databases run on IBM machinery.

Oracle had already moved into direct competition with HP through its acquisition this year of Sun Microsystems, and it highlighted its aim of selling integrated systems combining both hardware and software when it hired Mr Hurd.