Search for Fiorina`s successor begins

By Tracy Burrows for HP

Johannesburg, 10 Feb 2005

Speculation is already rife about who will replace Carly Fiorina as HP CEO, following her abrupt departure from the company yesterday.

Fiorina`s resignation as HP chairman and CEO was announced yesterday, with both Fiorina and HP citing "differences with the board over strategy" as the reason for her departure. Her ouster came after "weeks and more" of meetings in which directors took issue with her inconsistent track record of executing on HP`s strategy, board members said. She will leave with a $21 million severance package.

Widely regarded as one of the most powerful businesswomen in the US, 50-year-old Fiorina drove the $19 billion merger with Compaq Computer in 2002. However, her strategies have not always been popular, and HP shares lost 63% of their value since she took the helm in July 1999. The shares rose as much as 10% yesterday, closing up nearly 7% yesterday afternoon.

CFO Robert Wayman, who has been named as interim chief executive, said HP did not plan to split the company up, but the board would not be "closed-minded" on strategy changes once it appoints a new CEO.

Wayman, who was also appointed to the HP board of directors, said the search for a new CEO is under way.

Reuters quotes corporate recruiters as saying Mike Zafirovski, Motorola`s former COO, is a top contender to become CEO. Other recruiters pitched Michael Capellas, current CEO of communications company MCI and former Compaq chief.

IT execs` verdict mixed

The news of Fiorina`s departure does not appear to come as a major surprise to top executives in the industry. Reports of strategy clashes between Fiorina and the HP board have circulated for some time.

However, Reuters reports that some are sympathetic - like Patricia Russo, chairman and CEO of Lucent Technologies, a former Fiorina colleague who is also a top-ranked woman executive.

"Being a CEO is a tough job," said Russo, who worked as a senior executive with Fiorina at Lucent.

Larry Ellison, CEO of Oracle, the world`s second biggest software maker, believes HP`s move last month to merge its lacklustre PC unit with its profitable printer business may have been the last straw.

"It was a terrible organisational decision that would make it impossible to measure the success of the PC division," Ellison told an investor conference in Santa Monica, California. Ellison has known Fiorina since her Lucent days.

Fiorina in SA

Fiorina has played a role in ICT development in SA, serving on the Presidential International Advisory Council on Information Society and Development. The council was formed in 2001 to advise President Thabo Mbeki and government ministers on development of SA`s ICT sector.

She last visited SA in September last year, when she accompanied the president on a visit to the Mogalakwena HP I-community project in Limpopo, to see what progress had been made.