Less than a year after his appointment as Chief Executive Officer, Léo Apotheker has been ousted by Hewlett-Packard's Board of Directors.
Taking his place will be former eBay chief and California Gubernatorial candidate Meg Whitman. HP made the announcement amid much speculation. In addition to this move, the Palo Alto, Calif. company said Ray Lane has moved from non-executive chairman to executive chairman of the board of directors. The company will hire a lead independent director as well. The changes are effective immediately.
Over the past year, the company has undergone a significant amount of changes including a shift in direction from consumer products to focusing on enterprise software.
Apotheker, a former CEO of SAP, came on board after HP fired Mark Hurd for inappropriate conduct after the board investigated a claim of sexual harassment. Hurd's dismissal caused a lot of controversy since he was successful and well-liked in the organization. Following his departure, several other HP executives including former Randy Mott, chief information officer and Pete Bocian, executive vice president and chief administrative officer also left.
Apotheker has come under fire for several decisions he made in his brief tenure as chief of HP. The change in emphasis, the decision to spin off the PC division and the announcement of the webOS devices and quick decision to drop them shortly thereafter all baffled investors and caused the stock to tank. It currently sits at $22.80 per share. A year ago, it was at around $40 per share.
HP now looks to Whitman to help lead turnaround the company's bad fortunes. The company has put its future in the hands of the Silicon Valley veteran.
We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead. Meg is a technology visionary with a proven track record of execution, Lane said in a statement.
Reaction on Wall St. was mixed. While many analysts approved of Apotheker's dismissal, they weren't exactly confident in Whitman's ability to lead HP.
Given the disappointing financial performance over the last few quarters and some questionable decision making including the high purchase price of Autonomy, handling of the spinoff of its PC operation, and abrupt shutdown of its webOS hardware business, we are frankly not surprised that a change is being considered, Shaw Wu, analyst at Sterne Agee said in a note to investors before dropping the hammer on Whitman.
While we believe she has proven to be a very capable manager helping grow eBay from a start-up into one of the largest internet companies, we think an ideal candidate for HPQ should have extensive experience in the enterprise market. In addition, we believe expertise in supply chain management would be helpful as well.
Toni Sacconaghi of Sanford Bernstein said HP should have done a more thorough search for the new chief.
We would view any decision not to conduct a comprehensive search of internal and external candidates for a permanent CEO role as unsatisfactory and unnecessarily hasty, Toni Sacconaghi, analyst at Sanford Bernstein, said in a note to investors.
Ben Reitzes, analyst at Barclays Capital, said the continued instability at HP could mean good things for its competitors, Dell and Apple. He also saw IBM and Dell taking advantage on the server said and NetApp and EMC benefiting in storage sales.