Pfeiffer deserved better

Coop says the sad saga of Compaq's ex-CEO demonstrates what happens when weasels run the board.
Written by Charles Cooper, Contributor

If you believe Ben Rosen, then Compaq's board of directors ought to be summarily fired for incompetence.

Not as if that is ever going to happen -- since Rosen would also find himself out the door -- but after reading Chairman Rosen's comments about the circumstances leading up to the decision to fire Eckhard Pfeiffer, you have to conclude that the company's board was guilty of gross negligence.

Either that, or the sundry suits were on Quaaludes.

In a revealing interview with PC Week about the decision to dump Eckhard Pfeiffer as CEO, Rosen says the board had been concerned that Compaq had failed to reach its full potential for nearly two years!

If true, this would be quite an admission of the board's failure to live up to its fiduciary responsibilities. Company shareholders, who have watched the value of their holdings shrivel over the last several months, would also have every right to sic the Bill Lerachs of the world on Compaq.

But the official story is too pat, too neat to be believable. In retrospect, you could plausibly argue that Compaq's board probably waited too long to make a move. In that same vein, the exodus of top-level talent could also be viewed as clear evidence of a deep-seated management problem.

Yet for all the signposts pointing in the direction of a supposed disaster, the move to show Pfeiffer the door only began this past February.

That task belonged to Rosen -- technology seer, industry luminary and venture capitalist extraordinaire -- and he blew it. If he knew things were going to hell in a hand basket, he needed to alert the obviously comatose board to the coming tech wreck.

He didn't and Pfeiffer walked the plank. So it goes in corporate America. But instead of taking some responsibility for the company's current malaise, Rosen and the other weasels on the board instead waged an aggressive propaganda campaign to finger Pfeiffer as the chief culprit after booting him -- just four days following the close of Compaq's annual customer conference.

As the new year began, Pfeiffer and his chief financial officer, Earl (The Pearl) Mason had obviously lost Wall Street's confidence. Compared to shares of rival Dell, the company's stock was a laggard performer. Stock price aside, however, Compaq still had a compelling story to tell: Besides dominating the consumer PC business, it commanded a sizeable presence in the enterprise market through earlier acquisitions of Tandem and Digital Equipment.

Even though the execution was far from perfect, the strategy was on the money. Pfeiffer moved the company far from its origins as a PC maker and deserves credit for building a computer superpower.

You wouldn't know that from the way Compaq treated the exec who literally led them away from the precipice eight years ago.

"There should have been a more gracious way for him to make an exit," said the chief executive of one of Silicon Valley's top software companies. "He deserved better."

You can say that again.

Do you think Pfeiffer got a raw deal? Let me know in the talkback below.

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