Apotheker Dismissed, eBay’s Meg Whitman Named Permanent CEO at HP
Former eBay (NASDAQ:EBAY) head and California governor hopeful Meg Whitman has been named to replace Hewlett-Packard (NYSE:HPQ) Chief Executive Officer Leo Apotheker. After only 11 months as CEO, Apotheker was ousted after cutting sales forecasts three times and shifting the company’s strategies without reassuring investors that they were the right moves. Whitman, who jointed HP’s board in January after a failed bid to become California’s governor last year, has been appointed permanent CEO by the board of directors rather than simply interim chief, as many had expected.
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“We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead,” said Ray Lane, who will become executive chairman of the board. “Meg is a technology visionary with a proven track record of execution. She is a strong communicator who is customer-focused with deep leadership capabilities. Furthermore, as a member of HP’s board of directors for the past eight months, Meg has a solid understanding of our products and markets.”
However, some analysts are worried that Whitman’s experience at consumer-oriented companies like eBay, Procter & Gamble (NYSE:PG), and Hasbro (NYSE:HAS) leave her ill equipped to handle HP’s business-computing divisions. Last month, Apotheker announced plans to spin off the company’s PC business in order to shift its focus from lower-margin consumer products to more profitable corporate businesses such as servers, software and network services. Only 25% of HP’s sales come from consumers.
But Whitman’s communication skills and understanding of customers were considered her strongest qualifications when the board was making its decision, according to one insider with knowledge of the discussions, two areas that were seen as Apotheker’s greatest shortcomings. While the board liked Apotheker’s plan to shift the company’s focus to software and services, poor earnings and Apotheker’s inability to garner shareholder support for and confidence in his strategy moves ultimately resulted in his dismissal. HP’s stock declined nearly 46% this year, to date.
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Giving her first interview as CEO today, Whitman said that her appointment did not signal a shift in strategy, and that HP would move forward with its planned $10.3 billion acquisition of British software maker Autonomy Corp. and follow Apotheker’s plan to look into the possibility of spinning off the personal-computer division.