Meg Whitman, formerly of eBay, has been confirmed as president and chief executive officer of Hewlett-Packard, the world's largest IT company by annual revenues. Whitman has replaced Léo Apotheker, the former boss of German software company SAP, who had been running HP for the previous 11 months. However, Apotheker has been well rewarded for his failure. As well as being given generous bonuses, he will leave with a $7 million severance payment plus $18 million worth of HP stock.
In a news release, executive chairman Ray Lane said:
"We very much appreciate Léo's efforts and his service to HP since his appointment last year. The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company's strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance."
As I reported on September 21 (Meg Whitman could land CEO role in HP soap opera), Apotheker's time in charge was notable for the disastrous entry into the tablet market with the WebOS-based Touchpad, the decision to pay a silly price for Autonomy, a British software company, and for damaging HP's PC business by intimating he wanted to get rid of it. The company's share price almost halved during his watch, though it increased when he appeared to be on the way out.
Whitman, who was already on HP's board of directors, has become HP's third CEO in the past year. Apotheker was brought in to replace Mark Hurd, who moved to Oracle after an expenses-rated scandal. At the time, Oracle boss Larry Ellison told The New York Times: "The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago." HP's board might, of course, dispute that. Hurd's removal has to compete with the appointments of Carly Fiorina (another failed CEO who halved the share price), Apotheker and now Whitman.
Although Whitman has had the experience of running a relatively small, web-based start-up company at eBay, she has no experience running a $126 billion giant involved in three major global businesses: enterprise-class data processing (hardware, software and consulting) second only to IBM; the world's largest PC company; and the world's largest printer company.
In a telephone interview with The Wall Street Journal's Kara Swisher, Whitman said her priorities were meeting Wall Street's expectations, integrating Autonomy, deciding what to do with the PC business, and getting to know HP and its employees. Whitman told Swisher: "I have been on the board for eight months, but I really need to get in there and meet its people. That is perhaps the most important thing to get right."
Lane also said "We will not sell" the PC business, though the affirmation is somewhat qualified by the fact that no one would buy it.
In an earlier article, Will Samsung buy HP's PC division?, I pointed out that Samsung was the only likely buyer. Samsung twice went public to say it wasn't interested (see Samsung not buying; HP not quitting PC business).
HP's announcement also noted that "Ray Lane has moved from non-executive chairman to executive chairman of the board of directors", so presumably Whitman will have an ally to help. However, Lane also knew Apotheker well and had said he was "ideally suited" to run HP.