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September 23, 2011 7:49 AM EDT
As expected, Hewlett Packard Co. has named Meg Whitman as president and chief executive officer, while Ray Lane has moved from non-executive chairman to executive chairman of the board.
Whitman, who joined the HP Board in January, had served as CEO of eBay for a decade.
"We are fortunate to have someone of Meg Whitman's caliber and experience step up to lead HP," said Lane, in a statement. "We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead."
The sudden leadership transition continues a trend of replaced leadership by HP's board of directors. Apotheker is the third CEO to be fired by HP after Carly Fiorina was forced out following a run-in with the HP board in 2005 and Mark Hurd, who was ousted in October 2010 following a sexual harassment investigation. Hurd is currently the co-president, director and board member of Oracle Corp. (NASDAQ:ORCL).
Whitman would succeed Leo Apotheker, who was in the job for only about 11 months and was not known for his operational skills. So, is there a fundamental problem with HP in choosing CEO candidates?
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"We do not believe that Leo had a reputation for operational strength, so to fire him for lack of operational skills seems to suggest a material fault by the board in vetting Leo as a candidate," BMO Capital Markets analyst Keith Bachman wrote in a note to clients.
"We very much appreciate Leo's efforts and his service to HP since his appointment last year. The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company's strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance," Lane said.
In addition, Ray Lane highly praised Meg Whitman on the post-close conference call on Sept. 22, which may be appropriate, but he also offered similar praise when Apotheker was hired.
"... we have concerns that HP may have opted for a quick solution, rather than engage in a meaningful and complete search for the optimal candidate," Bachman said.
However, several analysts have welcomed the move as Whitman is considered as a more popular CEO who had a track record of success. However, critics doubt whether Whitman necessarily has the ideal experience to run a diverse hardware centric company like HP.
"We view the CEO change is a first step in the right direction and should be viewed positively by the Street," Auriga analyst Kevin Hunt said in a note to clients.
"Ms. Whitman has a strong track record as a leader who gets results, and we don't believe that her lack of enterprise experience is necessarily a negative at this time," Hunt added.
Whitman, who unsuccessfully ran for California governor in 2010, joined eBay on March 1998, when it had 30 employees and revenues of approximately $4 million. When she departed in late 2008, the company had grown to about 15,000 employees and $8 billion in annual revenue.
"I am honored and excited to lead HP. I believe HP matters - it matters to Silicon Valley, California, the country and the world," Whitman said in a statement.
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