HPs CEO Fiorina Steps Down

Updated: Hewlett-Packard's Chairman and CEO Carly Fiorina has resigned, effective immediately, citing differences over HP's future. CFO Robert Wayman steps in as interim CEO.

Carly Fiorina, whose controversial six years as head of Hewlett-Packard Co. was highlighted by the companys purchase of Compaq Computer Corp. in 2002, resigned Wednesday as chairman and CEO.

HP Chief Financial Officer Robert Wayman will step in as interim CEO, while Patricia Dunn, a member of the board of directors since 1998, will take over as non-executive chairman, HP said in a statement released Wednesday morning. Wayman also was named to the board of directors.

Both appointments take effect immediately.

"Carly Fiorina came to HP to revitalize and reinvigorate the company," Dunn said in a statement. "She had a strategic vision and put in place a plan that has given HP the capabilities to compete and win. We thank Carly for her significant leadership over the past six years as we look forward to accelerating execution of the companys strategy."

Fiorina said that the resignation was the result of disagreements on HPs future.

"While I regret the board and I have differences about how to execute HPs strategy, I respect their decision," she said in a statement. "HP is a great company and I wish all the people of HP much success in the future."

Fiorina will retain her pension, according to HP.

During conference calls Wednesday morning with analysts and media, Wayman said he will focus his efforts during his stint as interim CEO on executing on the existing strategy. Wayman, who has talked of retirement in recent months, said he will return to his CFO post once Fiorinas successor is found.

He also said Fiorinas resignation was not prompted by financial results. HP is scheduled to report its quarterly results Feb. 16, and that the results are in line with analyst expectations.

Dunn said that the board reached a decision on Tuesday and asked Fiorina to resign. She agreed. Dunn also said that the board had been discussing options for several weeks. Those deliberations included discussions with outside advisers, including Larry Sonsini, HPs legal counsel during the proxy fights over the Compaq acquisition.

"It is not a sudden decision," she said. "We have had a series of deliberations over the course of weeks and longer. … It may seem precipitous, but it was a well-deliberated decision."

Fiorinas resignation follows months of criticism from inside the industry and inconsistent results. In the third quarter last year, HP stunned analysts when it announced that its Enterprise Storage and Servers group lost $208 million, due to problems with order fulfillment and a migration of its order management operations.

/zimages/6/28571.gifFor more on the Enterprise Storage and Servers groups loss and the shakeup that followed, click here.

Over the past year, Fiorina also has consolidated HPs businesses, last year combining its enterprise systems group with its services unit, and earlier this year folding its PC business into the highly profitable Imaging and Printing Group, which generates almost three quarters of HPs revenues.

Over the past few years, Fiorina also has overseen HPs Adaptive Enterprise utility computing strategy, with the goal of making technology more responsive to business needs.

However, it was the companys purchase of Compaq for about $19 billion that Fiorina will be remembered for. That purchase followed a bitter proxy battle with HP heir Walter Hewlett, who worried that bringing Compaq into the fold would hurt the companys profitable businesses and force it to rely too heavily on a shaky PC business. The board of directors backed Fiorinas decision to pursue the purchase.

The pressure had been mounting on Fiorina, 50, in recent weeks. Reports circulated last month that the board of directors was considering pulling back on some of Fiorinas duties. HP spokespeople denied that any changes were under way.

Next Page: Board: Leadership change needed.