Hewlett-Packard Co. (HPQ)’s board plans to meet to consider whether to oust Leo Apotheker as chief executive officer after less than 11 months on the job, two people familiar with the matter said.
Under a scenario being considered, Hewlett-Packard’s directors may appoint former EBay Inc. (EBAY) CEO Meg Whitman as his successor, possibly on an interim basis, said one of the people, who asked not to be named because the plans aren’t public.
If the board carries through on the plan, Apotheker, 58, would depart after slicing sales forecasts three times since he became CEO in November and presiding over strategy shifts that left shareholders doubting his credibility. The company’s stock has plunged 47 percent on his watch, and “investor exasperation” with management is at its highest in more than a decade, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., said in a research report last week.
Hewlett-Packard, based in Palo Alto, California, rose as much as 6.1 percent on the New York Stock Exchange, after Bloomberg reported the possible management change, reversing an earlier decline. It gained 92 cents to $23.39 as of 11:23 a.m. Through yesterday, it lost almost half its value since closing at $42.04 on the last trading day before Apotheker became CEO.
Whitman, who joined Hewlett-Packard’s board in January after a failed bid to become California’s governor last year, had a mixed record at EBay. As CEO for a decade, she took the company public and pioneered online commerce for small businesses. Yet she also failed to halt a slowdown in revenue growth and overpaid for Skype Technologies SA after a three-way bidding war with Google Inc. (GOOG) and Yahoo! Inc. (YHOO).
‘Near Universal Opposition’
Pressure on Apotheker intensified last month after he announced a sweeping overhaul that included a $10.3 billion acquisition of Autonomy Corp. and a possible spinoff of Hewlett- Packard’s personal computer division. He also reversed course on a plan announced only five months earlier to put the WebOS mobile operating system onto the company’s computers.
While the shifts were designed to push Hewlett-Packard into higher-margin products, investors said the company risks paying too much for Autonomy, and that it announced the possible spinoff too early, according to Sacconaghi.
“Our conversations with investors continue to point to near universal opposition of the Autonomy acquisition, due to its high price,” he wrote in the Sept. 13 note.
The plunge in Hewlett-Packard’s stock left it susceptible to buyers looking to break it up and acquire the pieces, according to Solaris Group LLC.
Apotheker, former CEO of German software maker SAP AG (SAP), aimed to transform Hewlett-Packard into a provider of more profitable software and services for businesses that are doing more computing on remote servers, via the so-called cloud. Yet, results were plagued by tepid demand for PCs, as consumers in growing numbers snapped up competing mobile devices and tablets, such as Apple (AAPL) Inc.’s iPad.
His tenure at Hewlett-Packard may barely outlast his 10- month stint as CEO of SAP. He resigned in February 2010 after an attempted price increase during the recession that rankled consumers and a clash with German unions on plans to cut jobs. He presided over the company’s first revenue decline since 2003 as customers delayed software purchases.
Apotheker joined Hewlett-Packard after Mark Hurd departed as CEO amid a scandal over a personal relationship with a company contractor. Hurd now is a co-president at Oracle Corp. (ORCL).
By Aaron Ricadela and Carol Hymowitz
Courtesy of Bloomberg News