Publication Date: Friday, February 11, 2005
Fiorina ejected from HP, has $21.1 million parachute
Fiorina ejected from HP, has $21.1 million parachute
(February 11, 2005) Employees rumored to welcome CEO's ouster
by Don Kazak and Jay Thorwaldson
Ousted Hewlett-Packard CEO Carly Fiorina has a $21.1 million golden parachute to soften her landing after getting pushed out of the Palo Alto-based high-tech institution this week.
Fiorina was fired by the HP board of directors Tuesday in an apparent disagreement over implementing the company's future strategy -- reportedly the result of months of tension as her promised increase in profits failed to materialize. The CEO since July 1999, Fiorina oversaw the company's controversial merger with Compaq.
News media are reporting this week that Fiorina's ouster was greeted with euphoria by many HP employees, particularly from outlying branches who felt more distant from her and more wedded to the employee-centric traditions known as "the HP Way."
"Each employee has (his or her) opinions," said HP spokeswoman Monica Sarkar, adding that the company wouldn't comment further on morale or reactions to the news of Fiorina's departure.
Sarkar confirmed the $21.1 million severance package.
Her firing also pleased the stock market, where HP shares surged 7 percent in value with the news, rising to a reported $21.53 a share.
The online newsletter SiliconValley.com reported Wednesday that the HP board's "displeasure with Fiorina was no big secret," noting that the company's share price has declined 50 percent during Fiorina's reign.
In a conference call with financial analysts Wednesday, interim CEO Robert Wayman said no structural changes are expected. "We continue to believe we have all the ingredients in place for success," he said.
Patricia Dunn, who has been named non-executive chairman of the board, said Fiorina's ouster was "not a change related to strategy but a change to accelerate that strategy," and added that there are no plans to sell or spin-off parts of the company.
Dunn said Fiorina executed the controversial merger with Compaq "in superior fashion," but added that the board "felt a new set of capabilities was called for now."
Speculation as to her successor is leaning toward Michael Cappelas, 50, the former CEO of Compaq who served as HP president for a time in 2002 following the merger, before becoming president and chief executive of MCI (formerly WorldCom).
Two members of the HP board were formerly on the Compaq board, and another reported supporter of Cappelas recently was named to the board.
HP Executive Vice President Vyomesh Joshi, also 50, a 25-year HP veteran in its profitable printing and imaging divisions, is rumored as an insider candidate.
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