On a webcast this morning, Hewlett Packard formally introduced its new CEO, former SAP CEO Leo Apotheker, offering some opening remarks but leaving it mostly open for questions. He was introduced by board member Bob Ryan, who offered a brief explanation on the process of finding a new CEO.
Ryan said HP's board led a thorough process and "considered an outstanding pool of internal and external candidates but unanimously agreed" that Apotheker was the right person. He said Apothecker was the only candidate who was offered the job. Asked to elaborate, he said that the board "cast the net very far and very wide." He said the job was a "desirable" one to many candidates but that the board ended up with about 6 candidates who could have done the job. Apotheker rose above the others as the best for the position, he said.
He applauded Apotheker's experience in the industry, saying that Apotheker has a "proven track record" of success as SAP's CEO, creating shareholder value and making SAP a driving force in the industry.
Apotheker said he was happy to be part of the HP family, adding, "I don't think there's another company in tech that can match HP's place in the market... I have a great appreciation for this company, its technology and its people."
Apotheker said the company was one with "tremendous financial strength and a strong balance sheet," with passionate employees who are hungry to win. He also praised the senior leadership team for its talent and said he is confident in HP's ability to deliver on the earnings forecast that was offered at the company's analyst day earlier this week.
Right out of the gate, the question came up about Apotheker's background in the software business and whether that could offer some insight into HP's focus on software.
To increase the value of the company, he said, it helps to remember that "software is sort of the glue that can make that happen. Software can make sure that various parts of our technology all fit well together." But it's not just software, he said. Value-added services are an important complement.
So does that mean that he sees the company going down the path of Oracle as an integrator of hardware and software? Is that where the industry is headed?
Apotheker answered the question more broadly by noting that "there is a massive disruption around all of the value chain and all elements of the technology stack. We believe there's a great opportunity there for us."
Pressed further, he was asked where HP lags or has holes in the stack - database? middleware? He said that "HP has such a diversified mix of products and services that I believe it's positioned to be a strong player in every part of the stack... But it's too early and too presumptuous for me to say which part is better... I believe there will be ample opportunity to discuss" what the company will do as it moves forward.
Apotheker was also asked to elaborate on his experience and what he brings to the table. He replied by pointing to his experiences leading and growing a software company like SAP. But, more importantly, he played up his global experience.
"HP is a global company and one of my attributes is being a global citizen," he said. "Speaking a few languages will help."
He noted that he has been in the global marketplace for 20 years and brings that experience of international business relations to the table. "As you know, HP is very focused in expanding the market and wants to grow faster in emerging markets.
"I have a lot of experience there," he said.
Apotheker will take the reins of the company on Nov. 1. Cathie Lesjak, who has run the company on an interim basis and has been clear since taking over that she did not want to be considered for it permanently, will return to her primary position as the company's Chief Financial Officer.
Separately, the company detailed Apotheker's compensation package in a regulatory filing this morning.
In a nutshell, his base pay will be $1.2 million but his incentive pay could be five times that. He also received a $4 million signing bonus and $4.6 million for relocating to the U.S. His incentive also includes 38,000 shares of HP stock, with about $1.6 million based on the current price, at the end of October and another 38,000 a year later.
There are also long-term incentives that includes more shares of restricted stock.