Leo Apotheker relieved as HP CEO; Meg Whitman takes the helm
Ever since HP’s August 18th decisions to discontinue webOS and look into a spin-off for their PC unit, CEO Leo Apotheker’s job has been in jeopardy. Now in a culmination of losses and a 47% plunge in stock that spanned the past year, Apotheker has been relieved of his duties and board member Meg Whitman has been promoted as HP Chief Executive Officer.
In a press release and an investor webcast, Hewlett-Packard confirmed the news and announced that former eBay CEO Meg Whitman will be taking over as president and chief executive officer. Whitman is widely accredited for bringing eBay to relevance, but is also responsible for the disastrous acquisition of Skype that ended with her leaving the company and running unsuccessfully for California office. In a statement, the new HP chief said: “I am honored and excited to lead HP. I believe HP matters – it matters to Silicon Valley, California, the country and the world.”
In addition to the promotion of Meg Whitman, the HP board also promoted Ray Lane from non-executive chairman to executive chairman of the board of directors, and he is expected to widely assist in running the company. Lane was apparently considered for the CEO position, yet an outsider was chosen due to the belief that internal managers “were not ready” to take over the reins.
Unfortunately, the shift of executives might not have a large effect on the company’s direction, as in an interview Whitman stated that the company stands by their recent actions and this “does not signal a change in the strategy”. Furthermore, HP still plans on going through with their purchase of British software maker Autonomy, even though most analysts believe the ~$10.3 billion figure to be a massive overpay.
Interestingly enough, the largest beneficiary of the firing may in fact be the ousted Leo Apotheker, as his severance package could total close to $25 million when all is said and done. The monstrous figure includes a severance payment of twice the ex-CEO’s salary and average performance bonus; however, the majority comes via the vesting of 800,000 shares at yesterday’s closing price of $22.80, which totals around $18.24 million in stock.