Hewlett-Packard Company

Date: Mar 18, 2005
Contributor: Darryl Debolt

HP Chairwoman Says CEO Search Going Well, But Doesn't Elaborate

Hewlett-Packard's interim chairwoman told shareholders Wednesday that the computer and printer maker's search for a successor to Carly Fiorina is on track but declined to discuss details.

Patricia Dunn, HP's non-executive chairwoman since last month, told shareholders even before formally calling the meeting to order that she would not field questions about the most pressing issue facing the company.

"I can tell you that the search is well under way, that we're pleased with our progress and that we are where we expected and wanted to be at this juncture," Dunn said.

HP's board ousted Fiorina Feb. 9, frustrated at the lethargic progress on her plan to reinvent HP since arriving in 1999. She was criticized for failing to generate expected profit and revenue growth from the $19 billion merger with Compaq Computer Corp. she orchestrated in 2002. HP's stock price has been stagnant since the deal.

When asked by a shareholder about the prospect of splitting HP into separate companies, Dunn said, "The board is always considering how it can take decisions that are consistent with long-term shareholder value."

Some analysts and experts said they expected Fiorina's ouster to precipitate a broad restructuring, possibly a spinoff of HP's imaging division, which includes its profitable printer business. The HP board considered breaking up the company on three occasions but rejected the idea each time, Fiorina said at an analyst meeting two months before her departure.

"It seems like shareholders would be happy if [HP] took any radical step to fix the company," said shareholder Winston Kotzan, who asked Dunn about the breakup.

Dunn acknowledged Wednesday there is debate over what business lines HP should be in, but said the board is focused on "executing the strategy that's on the boards now."

Directors have said they expect to find a CEO who will buy into the existing business plan and likely will hire a new chief executive from outside the company.

Interim CEO Robert Wayman, who remains HP's chief financial officer, also focused on the company's performance Wednesday rather than the succession issue.

"Although there's been a great deal of media coverage and speculation since we made the announcement," he said, "I'm happy to report that we have been as a team very able to continue to execute against our strategy, and we are making good progress in that regard."







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