HP ousts First Lady of America Inc
CARLY FIORINA left Hewlett-Packard last night with a $21 million (£11 million) golden handshake after being sacked as chairman and chief executive of the computer giant.
HP shares, which have crashed by 50 per cent in the five and a half years that Ms Fiorina has led the group, soared 10 per cent in early trading yesterday as the company said that it was seeking a more hands-on chief executive capable of driving profitability.
Her dismissal was a stunning blow to one of America’s most powerful businesswomen and an apparent repudiation of HP’s highly controversial $19 billion acquisition of Compaq Computer in 2002, on which Ms Fiorina had staked her reputation.
The board of HP, however, insisted yesterday that it remained committed to the company’s current business strategy. Robert Wayman, the chief financial officer who was named interim chief executive, said there were no plans to break up the group despite growing pleas from Wall Street to spin off HP’s highly profitable printing business or sell its personal computer unit.
Yesterday Ms Fiorina made no secret of the fact that there had been a boardroom split over strategy and that she was not leaving voluntarily. She said: “While I regret the board and I have differences about how to execute HP’s strategy, I respect their decision.”
HP said that it would begin seeking a permanent new chief executive immediately and is expected to focus its search on external candidates. Yesterday the company named Patricia Dunn, a director since 1998, as its new non-executive chairman.
In her tumultuous years at the helm of HP, Ms Fiorina drew criticism for her autocratic management style, which some investors felt had stifled the company’s growth.
Ms Dunn admitted that discussions over the leadership of HP began several weeks ago. “The final decision was made on February 8,” she said. “It’s not a sudden decision. We have had a series of deliberations over the course of weeks and longer.” She said consultants had been brought in to help “the board make sure it is doing everything it needs to do”.
Ms Fiorina’s departure ends a stormy era at HP, a Silicon Valley icon. She pushed through the Compaq merger as part of a bold plan to remake HP into a computing and services giant that could challenge IBM.
But the merger never delivered the promised results and, as she worked to integrate the two huge companies, Dell leapfrogged HP to become the leading seller of personal computers.
HP’s server, storage and personal computer units have all struggled since the merger and only the company’s star business, imaging and printing, has kept the group looking respectable.
When Ms Fiorina announced her blockbuster plan to merge with Compaq three years ago, critics derided the idea of combining the unprofitable PC businesses of both companies.
Ms Fiorina’s biography was removed from the executive team page of HP’s website long before employees turned up for work to discover that their chief executive had been ousted.
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