February 27, 2024

Whitman Expected to Be Named at H.P.

The decision to replace Léo Apotheker, the company’s chief executive, after only 11 months on the job is all but made, lacking only a final vote, said the person, who is not authorized to speak for the board. While Mr. Apotheker is going, his strategy, including consideration of spinning off H.P.’s personal computer business from other parts of the company, will remain in place.

Ms. Whitman is also a member of the H.P. board. According to a person with knowledge of the board’s decision, she was chosen for her track record of successfully managing a large, complex business, her communications skills both internally and with Wall Street and her ability to lead senior executives through corporate transitions.

All of these were seen as Mr. Apotheker’s shortcomings. While the board liked his plan to move H.P. to a business with more software and services, H.P.’s poor earnings, and unhappiness with Mr. Apotheker by some members of the company’s powerful executive committee ultimately spelled his downfall, the person close to the board said.Hewlett-Packard’s stock has declined more than 50 percent from its 52-week high, but rose almost 7 percent on Wednesday on reports that Mr. Apotheker faced dismissal. The shares were down 4 percent Thursday in a general sell-off on Wall Street.

Ms. Whitman might not unwind much of Mr. Apotheker’s strategy of moving Hewlett-Packard toward becoming more of a software services company in the mold of I.B.M. or SAP. Although H.P.’s board is comfortable with the strategy laid out last month by Mr. Apotheker, its members questioned about his ability to communicate that strategy within the company and to outsiders, especially investors.

Although Ms. Whitman lacks experience running a complex technology company that sells to consumers as well as corporate customers. the company’s board considers her communications skills and understanding of customers to be her strongest qualifications for the job, according to a person with knowledge of discussions among directors, but who is not authorized to speak for the board.

Ms. Whitman, who ran eBay as it grew from a start-up to a major online retailer, left the company just as growth began to stall. She unsuccessfully ran for governor of California and was hired in March by Kleiner Perkins Caufield Byers, a venture capital firm, as a strategic adviser. She has been a member of the H.P. board since January.

One of the other directors who had been recently appointed to the board and who was considered an ally of Mr. Apotheker resigned from the board earlier this month. The company did not announce it, but reported it on Page 93 of a filing to the Securities and Exchange Commission that on September 8, Dominique Senequier, chief executive officer of AXA Private Equity, stepped down because of “other professional commitments.”

She only joined the board in January, with four other new members including Ms. Whitman. At the time, some corporate governance groups criticized the board appointments as an attempt by Mr. Apotheker to add allies to the board.

The company said in it filing that Ms. Senequier is expected to continue to serve as a director of H.P. until its next annual meeting of stockholders, in March.

H.P.’s board has for some time wondered whether businesses like PCs should even coexist alongside those like large-scale corporate computing. Mr. Apotheker’s response was to take the company into higher-value software and services.

Mr. Apotheker’s goals for H.P. were clear from the start, but in almost a year his strategy never quite took shape. He was named to head H.P. on Sept. 30, and the next day declared that software was the “glue” that held H.P. together, a comment that surprised observers because it suggested that H.P. might start to resemble SAP. In the most recent quarter, software accounted for just 2 percent of Hewlett-Packard’s total revenue.

Mr. Apotheker made a series of announcements last month that had the board’s blessing, but surprised and upset investors. He said H.P. was paying $11.7 billion in cash for Autonomy, a British software company. a deal that analysts immediately branded as overpriced. He announced the discontinuation of its TouchPad tablet that had been introduced only weeks before. He also said the company was considering the possible sale or spinoff of H.P.’s mainstay PC business. The stock lost about a quarter of its value on the news.

This article has been revised to reflect the following correction:

Correction: September 22, 2011

An earlier version of the capsule summary for this article misstated Ms. Whitman’s given name as Angela. As the article and picture caption correctly note, it is Meg.

Article source: http://www.nytimes.com/2011/09/23/technology/whitman-expected-to-be-named-at-hp.html?partner=rss&emc=rss

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