Compaq CEO’s bonus in 2000 was $3.8 m.

NEW YORK: Compaq Computer Corp. chairman and chief executive Michael Capellas

received a base salary of $1.2 million and a $3.8 million bonus last year, a big

increase over his 1999 compensation. Capellas last year took over the reins of

the top personal computer maker when Ben Rosen, who was chairman since 1982,

retired from service.

Capellas, 46, was elected into the top slots in September last, just as the

personal computer sector was poised for a drop-off in demand. In addition to the

new title, last year Capellas received $24.4 million in restricted stock awards

as well as options for 850,000 common shares, which would be worth $24.5 million

if Compaq's stock appreciates 10 per cent over the life of the options.

The shares have a strike price of $18.10 and expire in December 2010.

Compaq's stock fell 10 cents to $18.40 on the New York Stock Exchange in

early-afternoon trading. The compensation package was a substantial increase

over what Capellas received in 1999, when he rose through the ranks to pick up

the titles of chief operating officer, president and chief executive.

In 1999, Capellas received a base salary and bonus that together added up to

$1.9 million, along with options for 1.8 million shares and about $5 million in

restricted stock awards. The stock price of Compaq, the leader in the out of

favor PC sector, has fallen to about half its year-high of $34.81. The

Houston-based firm was forced to warn that its latest fourth quarter would

suffer from sluggish demand that has hit the entire PC market. The company also

said it expected to suffer from slack sales into the current year 2001.

(C) Reuters Limited 2001.