Is HP's board the worst ever? (Ousts CEO, Apotheker Only to Replace him with Meg Whitman)

CNN Money ^ | 09/22/2011 | By Julianne Pepitone

[SeekAndFind]

The process of firing a CEO is always full of drama -- just ask Yahoo. But Hewlett-Packard's board has taken it to a new level.

It's all but certain that members of HP's (HPQ, Fortune 500) own board leaked the big news -- that they were planning to oust CEO Léo Apotheker -- to media outlets including Fortune on Wednesday.

The leak hit before HP finally made an official announcement on Thursday, saying it had replaced Apotheker with former eBay (EBAY, Fortune 500) head Meg Whitman. The surreal spectacle raised the bar for boardroom dysfunction.

"These guys are a bunch of clowns, surpassed in incompetence only by Yahoo's board," Eric Jackson, managing member of Ironfire Capital, wrote in a Wednesday in a screed titled "HP's Board of Directors Is Pathetic."

Corporate governance specialist Richard Davis, partner at leadership consultancy firm RHR International, didn't disagree with that view.

"Just look at what's been going on the past several years at HP -- clearly, something is going on with this board," Davis said.

Apotheker's messy firing is a mirror of his messy hiring. HP came under fire last September for the surprising choice: Apotheker was ousted less than a year into his CEO gig at software giant SAP (SAP), which is struggling to hold its market share against onslaughts from Oracle (ORCL, Fortune 500) and IBM (IBM, Fortune 500). Apotheker had no experience in hardware, the business that drives most of HP's revenue.

A New York Times article posted Wednesday revealed that most HP board members didn't even meet Apotheker before hiring him.

[SoJoCo]

Is it the worst ever? No, but it’s got to be in the running. After having made a major decision on their last CEO they don’t even bother doing even a cursory search for a new one. They grab the first person they think of.

[dfwgator]

How many failed Republican female candidates will HP employ as their CEO before it’s all done.

[rhinohunter]

Paging Netflix board...

[Revolting cat!]

The entire board is up for re-election soon, writes this morn WSJ. Out with them!

[SoJoCo]

How many failed Republican female candidates will HP employ as their CEO before it’s all done.

Oh my God, can Christine O'Donnell be next if Whitman doesn't cut the mustard??

[SoJoCo]

A New York Times article posted Wednesday revealed that most HP board members didn't even meet Apotheker before hiring him.

At least that isn't the case in this instance. Whitman's been on the HP board for a whole 8 months.

[who_would_fardels_bear]

There IS something wrong with capitalism when clowns like this are on boards.

How did they get there? Why were they allowed to make such poor decisions?

The "free market" will supposedly eventually winnow them out of the market, but why hasn't this already happened?

Entire technologies have come and gone while these clowns have been raking in their yearly salaries, stock options, etc.

Are the stockholder's that daft as to have allowed these people to represent their interests for so long? Or are there institutional barriers that are allowing these idiots to retain employment?

[100American]

As an ex-employee of HP I have a completely different biew of this . To the present Apotheker took the HP reseller channel and thumbed his nose at them, and then set out to destroy what Hp had built over several years (like the largest PC mfg in the world) He then turns and tries to burn most of their funds buying a speculative company not congruous to HP’s business model and then spin off the PC division, close down the tablet business and on and on. If you understand the SAP model, they are not well liked at all in the business hence why they are losing share to others, they are parasitic in their practices and not well liked at all.

HP had a unique culture once, I was there when Carly came aboard and they had lost the edge, the Compaq folks used to say HP would aim, aim, aim, aim shoot. We said the opposite, shoot, shoot, shoot, shoot aim about them. But from where I was in the company I could see that Carly was faced with an entrenched bureacracy and needed to move more strongly into the PC space, dominated by Compaq at the time. Shaking things up was the only thing she could do to break the logjam.

So to me Meg makes more sense to hire than Ole Lou, she knows how to build a collaborative culture which is how HP used to be. And I laugh at the investment firms who got caught with their pants down betting on this, the purchase of Autonomy will not go through and I for one am extremely optimistic about their chances

[SoJoCo]

I’m a current HP employee and just got my email from “Meg and Ray” announcing the new team. I’m prepared to give them the benefit of the doubt. We’ll see.

[BilLies]

Since you have a touch for what Republican female (or I assume male candidates) can “cut” would you please give the statistics on how many DemoCraps have been employed as CEO, officers and or directors of HP or other national corporations? For instance Jamie S. Gorelick’s resume?

[Dr. Sivana]

How many failed Republican female candidates will HP employ as their CEO before it’s all done.

Linda McMahon could bring the cool factor back to HP.

[redgolum]

When you get to a certain level, it becomes very hard to be held accountable for your actions. I have seen CEO’s drive a company into the ground by mismanaging it, only to be rehired by another company. I know of two personally who have never been successful at any company they have run, but they keep getting the head job.

[Trajan88]

I became a HP stock holder when HP bought the company I invested in years ago... Compaq.

It is stunning HP's stock has declined nearly 50% in the last year.

Pathetic.

[rockvillem]

As an ex-employee of HP I have a completely different biew of this . To the present Apotheker took the HP reseller channel and thumbed his nose at them, and then set out to destroy what Hp had built over several years (like the largest PC mfg in the world) He then turns and tries to burn most of their funds buying a speculative company not congruous to HP’s business model and then spin off the PC division, close down the tablet business and on and on. If you understand the SAP model, they are not well liked at all in the business hence why they are losing share to others, they are parasitic in their practices and not well liked at all.

I've followed HP and analyzed the Autonomy deal - your analysis is completely consistent with the market reaction to this guy and what I know. Thanks for the closer insight. This guy was FIRED from SAP and yet HP hired him. He went out and bought Autonomy for $10 billion, which knocked 1/5 off the market value of HP's stock in a day. What the heck was the board thinking???? Mark Hurd was guilty of infidelity and for that he was canned and Oracle scooped him up. Now HP has blown $10 billion on Autonomy, caused utter confusion in the market about their direction on PCs and tablets, and is bringing in the next Fiorna/Dunn. Good grief!

[rawhide]

I read that Whitman disagrees with HP exiting the consumer PC market and she has asked all consumers who bought the HP Touchpads to return them, so they can resell them at the proper price, and thus make a profit. /s

[KT22]

This is a general reply. I was marketing vendor for HP in the eighties and into late nineties. Then worked for other, much more successful companies. My take is that HP started to become an extremely permissive and passive company. They boasted of their workers who worked from home and bragged of Windsurfing M-W to inspire ideas. Things like that. They were behind the curve with the internet. They were behind the curve with the world — buying a commodity after a commodity. They were invisible in the channels of marketing. Above all, they hired Carly to fill a Political Correctness slot. But they passed over Ann Livermore! It would be a way different company if ann had received the nod.