Carly Fiorina resigns
02-09-2005, 01:10 PM
#1
Suzuka Master
Thread Starter
Carly Fiorina resigns
Carly Fiorina Is Forced Out
As H-P CEO, Chairman
By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
February 9, 2005 1:45 p.m.
Hewlett-Packard Co. Chairman and Chief Executive Carly Fiorina, after five and a half tumultuous years at the giant printer and computer maker, has been ousted by its board of directors.
[nowides] [Carly Fiorina]
Board members say they asked for the resignation of Ms. Fiorina, architect of a controversial $19 billion purchase of Compaq Computer Corp. that has failed to produce the benefits expected. Her resignation was effective immediately.
Robert Wayman, H-P's longtime chief financial officer, was appointed interim CEO and was named to the Palo Alto, Calif. company's board of directors. Patricia Dunn, an H-P director since 1998 and vice chairman of Barclays Global Investors, was named non-executive chairman of the board. Ms. Dunn said an executive search firm is being engaged immediately to launch a search for a new CEO.
Shares of H-P, which jumped more than 10% on the news, gained $1.31, or 6.5%, to $21.45 in afternoon trading on the New York Stock Exchange.
Ms. Fiorina's departure follows recent discussions with directors over the proper operating structure for H-P. As reported by the Wall Street Journal in January, the board had discussed a management reorganization that would distribute some key day-to-day responsibilities of Ms. Fiorina's to three other senior executives, a plan that Ms. Fiorina opposed, according to people familiar with the matter. H-P has called reports of the discussions "speculation." (See article.)
RECENT NEWS
• H-P Ex-Director Perkins Rejoins Its Board, Succeeding Litvack
02/08/05
• Long & Short: Fiorina Fails at H-P After Betting Badly
1/26/04
• Hewlett-Packard Board Considers a Reorganization
01/24/05
MORE
• Fiorina, Wayman bios | H-P's press release
• CNBC Video: NBC's Jim Goldman reports on the resignation of Carly Fiorina amid a sliding stock price and the company's mediocre performance.
• See a transcript of Hewlett-Packard's conference call for analysts, provided by Thomson StreetEvents (www.streetevents.com). (Adobe Acrobat Required.)
CAST YOUR VOTE
• What do you think of Carly Fiorina's resignation?
In a conference call, H-P's new chairman Ms. Dunn said that Ms. Fiorina had done an "outstanding" job as CEO and that she had laid a "solid foundation for (H-P's) success in the marketplace." Ms. Dunn added that the board had been deliberating for some time over the company's performance and its CEO's performance.
After several meetings over the past few weeks, the board reached a decision and asked Ms. Fiorina, 50 years old, to step down on Tuesday afternoon, she said. "Looking forward, the CEO job is very reliant on a hands-on execution and a new set of capabilities is called for," said Ms. Dunn.
In a statement, Ms. Fiorina said, "While I regret the board and I have differences about how to execute H-P's strategy, I respect their decision."
Ms. Fiorina is receiving a severance package worth $21.1 million as part of her departure, a company spokesman said Wednesday. The spokesman declined to provide details, but said the package was "consistent" with H-P's previously disclosed severance policies. The company will take a charge for the amount against the current quarter's earnings, the spokesman said.
Ms. Dunn said the entire nine-member board will act as a search committee for a new CEO. While both internal and external candidates will be considered, Ms. Dunn said she "anticipates an external candidate" will ultimately be selected, "but we don't know for sure." Among the H-P executives that Wall Street regards highly is Vyomesh "VJ" Joshi, who runs the company's personal computing and printer business.
Mr. Wayman, 59, said that his chief task as interim CEO is to help find a permanent chief executive and to make sure H-P performs consistently as the company goes through the search period. During this time, he will wear both hats of CFO and CEO. He plans to step back into his role as CFO after the search.
Mr. Wayman, a 36-year veteran of the company, has discussed retiring from H-P in the last few years and he said this current assignment wouldn't be an issue with regard to his retirement plans. He added that H-P's first-quarter earnings, which are due next week, will be in line with expectations.
Both Ms. Dunn and Mr. Wayman emphasized that the board believes that H-P, which plays in everything from printers to computers to services, is stronger as a single entity rather than broken up into different pieces. Over the last year, the company has faced calls by Wall Street and some investors to break itself up and to spin off its highly lucrative printer unit as a way to boost its lagging stock price.
[Investors grade H-P]
Some Wall Street analysts said Wednesday the ouster increases the pressure on H-P to spin off the printer business, with Bear Stearns analyst Andrew Neff going so far as to lower its rating on the company, saying the stock reflects the potential for a split, with "minimal upside if there's a split and meaningful downside if there isn't."
"It appears that there's some incremental frustration," said Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co. "The change signals either the board's frustration or impatience with the status quo."
However, Ms. Dunn said the board intends to find a new leader who shares the company's vision for a united company. "There are no changes to the business portfolio anticipated," she told analysts and investors.
For Ms. Fiorina, the resignation is an abrupt end to her tenure as one of the most visible women in American business. She joined H-P in July 1999 as the company's first outside CEO. She had previously spent years as a top executive at telecom firm Lucent Technologies Inc. At H-P, she received a mandate to transform a Silicon Valley icon that had fallen behind its peers and was viewed as an inefficient giant.
During her tenure, Ms. Fiorina centralized the company by winnowing down the number of H-P's business units from 83 to just a handful. She pushed through the bitterly contested Compaq acquisition in 2002, overcoming opposition from then board member Walter Hewlett, the son of H-P co-founder William Hewlett. H-P's revenues have soared under Ms. Fiorina, partly because of the deal with Compaq. In November, the company reported fiscal 2004 net income of $3.5 billion, up 38% from a year earlier, while revenue at $80 billion was up 9%.
But Ms. Fiorina was unable to boost H-P's stock price, which is down some 50% since her arrival, and the company's performance has been inconsistent. Last August, H-P badly missed Wall Street earnings projections. H-P still faces many of the same challenges it did when she arrived, including a barely profitable PC unit and a weak enterprise computing business. Many top H-P executives have left to join rivals. Ms. Fiorina also faced continued criticism that she didn't fit into H-P's collegial culture.
In recent months, Ms. Fiorina has been the target of intensifying criticism from technology analysts and the media for failing to execute an ambitious diversification strategy -- an attempt to change H-P from a relatively marginal company that derived a disproportionate percentage of its profits from printers and ink into a Silicon Valley consulting and computing powerhouse.
Some Wall Street analysts have been suggesting that shareholders might be better off if the company were split into two or more pieces because the relatively dowdy printer business was sucking up resources and shifting focus from higher-profit opportunities in consulting services and areas of emerging technology.
Write to Pui-Wing Tam at pui-wing.tam@wsj.com
http://online.wsj.com/article/0,,SB1...149934,00.html
As H-P CEO, Chairman
By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
February 9, 2005 1:45 p.m.
Hewlett-Packard Co. Chairman and Chief Executive Carly Fiorina, after five and a half tumultuous years at the giant printer and computer maker, has been ousted by its board of directors.
[nowides] [Carly Fiorina]
Board members say they asked for the resignation of Ms. Fiorina, architect of a controversial $19 billion purchase of Compaq Computer Corp. that has failed to produce the benefits expected. Her resignation was effective immediately.
Robert Wayman, H-P's longtime chief financial officer, was appointed interim CEO and was named to the Palo Alto, Calif. company's board of directors. Patricia Dunn, an H-P director since 1998 and vice chairman of Barclays Global Investors, was named non-executive chairman of the board. Ms. Dunn said an executive search firm is being engaged immediately to launch a search for a new CEO.
Shares of H-P, which jumped more than 10% on the news, gained $1.31, or 6.5%, to $21.45 in afternoon trading on the New York Stock Exchange.
Ms. Fiorina's departure follows recent discussions with directors over the proper operating structure for H-P. As reported by the Wall Street Journal in January, the board had discussed a management reorganization that would distribute some key day-to-day responsibilities of Ms. Fiorina's to three other senior executives, a plan that Ms. Fiorina opposed, according to people familiar with the matter. H-P has called reports of the discussions "speculation." (See article.)
RECENT NEWS
• H-P Ex-Director Perkins Rejoins Its Board, Succeeding Litvack
02/08/05
• Long & Short: Fiorina Fails at H-P After Betting Badly
1/26/04
• Hewlett-Packard Board Considers a Reorganization
01/24/05
MORE
• Fiorina, Wayman bios | H-P's press release
• CNBC Video: NBC's Jim Goldman reports on the resignation of Carly Fiorina amid a sliding stock price and the company's mediocre performance.
• See a transcript of Hewlett-Packard's conference call for analysts, provided by Thomson StreetEvents (www.streetevents.com). (Adobe Acrobat Required.)
CAST YOUR VOTE
• What do you think of Carly Fiorina's resignation?
In a conference call, H-P's new chairman Ms. Dunn said that Ms. Fiorina had done an "outstanding" job as CEO and that she had laid a "solid foundation for (H-P's) success in the marketplace." Ms. Dunn added that the board had been deliberating for some time over the company's performance and its CEO's performance.
After several meetings over the past few weeks, the board reached a decision and asked Ms. Fiorina, 50 years old, to step down on Tuesday afternoon, she said. "Looking forward, the CEO job is very reliant on a hands-on execution and a new set of capabilities is called for," said Ms. Dunn.
In a statement, Ms. Fiorina said, "While I regret the board and I have differences about how to execute H-P's strategy, I respect their decision."
Ms. Fiorina is receiving a severance package worth $21.1 million as part of her departure, a company spokesman said Wednesday. The spokesman declined to provide details, but said the package was "consistent" with H-P's previously disclosed severance policies. The company will take a charge for the amount against the current quarter's earnings, the spokesman said.
Ms. Dunn said the entire nine-member board will act as a search committee for a new CEO. While both internal and external candidates will be considered, Ms. Dunn said she "anticipates an external candidate" will ultimately be selected, "but we don't know for sure." Among the H-P executives that Wall Street regards highly is Vyomesh "VJ" Joshi, who runs the company's personal computing and printer business.
Mr. Wayman, 59, said that his chief task as interim CEO is to help find a permanent chief executive and to make sure H-P performs consistently as the company goes through the search period. During this time, he will wear both hats of CFO and CEO. He plans to step back into his role as CFO after the search.
Mr. Wayman, a 36-year veteran of the company, has discussed retiring from H-P in the last few years and he said this current assignment wouldn't be an issue with regard to his retirement plans. He added that H-P's first-quarter earnings, which are due next week, will be in line with expectations.
Both Ms. Dunn and Mr. Wayman emphasized that the board believes that H-P, which plays in everything from printers to computers to services, is stronger as a single entity rather than broken up into different pieces. Over the last year, the company has faced calls by Wall Street and some investors to break itself up and to spin off its highly lucrative printer unit as a way to boost its lagging stock price.
[Investors grade H-P]
Some Wall Street analysts said Wednesday the ouster increases the pressure on H-P to spin off the printer business, with Bear Stearns analyst Andrew Neff going so far as to lower its rating on the company, saying the stock reflects the potential for a split, with "minimal upside if there's a split and meaningful downside if there isn't."
"It appears that there's some incremental frustration," said Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co. "The change signals either the board's frustration or impatience with the status quo."
However, Ms. Dunn said the board intends to find a new leader who shares the company's vision for a united company. "There are no changes to the business portfolio anticipated," she told analysts and investors.
For Ms. Fiorina, the resignation is an abrupt end to her tenure as one of the most visible women in American business. She joined H-P in July 1999 as the company's first outside CEO. She had previously spent years as a top executive at telecom firm Lucent Technologies Inc. At H-P, she received a mandate to transform a Silicon Valley icon that had fallen behind its peers and was viewed as an inefficient giant.
During her tenure, Ms. Fiorina centralized the company by winnowing down the number of H-P's business units from 83 to just a handful. She pushed through the bitterly contested Compaq acquisition in 2002, overcoming opposition from then board member Walter Hewlett, the son of H-P co-founder William Hewlett. H-P's revenues have soared under Ms. Fiorina, partly because of the deal with Compaq. In November, the company reported fiscal 2004 net income of $3.5 billion, up 38% from a year earlier, while revenue at $80 billion was up 9%.
But Ms. Fiorina was unable to boost H-P's stock price, which is down some 50% since her arrival, and the company's performance has been inconsistent. Last August, H-P badly missed Wall Street earnings projections. H-P still faces many of the same challenges it did when she arrived, including a barely profitable PC unit and a weak enterprise computing business. Many top H-P executives have left to join rivals. Ms. Fiorina also faced continued criticism that she didn't fit into H-P's collegial culture.
In recent months, Ms. Fiorina has been the target of intensifying criticism from technology analysts and the media for failing to execute an ambitious diversification strategy -- an attempt to change H-P from a relatively marginal company that derived a disproportionate percentage of its profits from printers and ink into a Silicon Valley consulting and computing powerhouse.
Some Wall Street analysts have been suggesting that shareholders might be better off if the company were split into two or more pieces because the relatively dowdy printer business was sucking up resources and shifting focus from higher-profit opportunities in consulting services and areas of emerging technology.
Write to Pui-Wing Tam at pui-wing.tam@wsj.com
http://online.wsj.com/article/0,,SB1...149934,00.html
02-09-2005, 02:13 PM
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Originally Posted by dabuda
not a big suprise, there was an article about her in businessweek a few weeks ago
seemed like she was already becoming distant and focusing on a "political" career
seemed like she was already becoming distant and focusing on a "political" career
My impression of her is that buy for the telecom boom that shot her to the top of Lucent, she and her imperial mangement style would have been slapped down hard a long time ago. As it is now, both of her key management jobs were clearly failures. The work she did at Lucent (which got her the HP job) is in retrospect just an unsustainable boom after the telecom deregulation act, combined with a lot of smoke and mirrors to make it appear that more was going on. At HP she has not only presided over a destruction of shareholder value, but she has significantly lagged behind all the major players in the business on just about every metric.
Good riddance.
[From a guy who worked there when she first came on, thought at the time that it was a great idea, and left a year later when it became clear that HP had become nothing but a vehicle for Carly Fiorina self-promotion.]
to the board.....
02-10-2005, 09:57 AM
#6
Banned
Originally Posted by EdgarFanCLS
I echo the good riddence sentiment. Hope our next CEO is better than the last.
<----- Current HP employee.
<----- Current HP employee.
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