HP picks ex-software exec Leo Apotheker as new CEO
SAN FRANCISCO (AP) -- Hewlett-Packard Co. has hired recently discarded software executive Leo Apotheker to steer the world's largest technology company as it tries to prove it can thrive without its previous leader, Mark Hurd.
Thursday's announcement ends HP's nearly two-month search to fill the void created when its board ended Hurd's five-year reign as CEO amid allegations of sexual harassment and deceptive expense reports.
Hurd's ouster wasn't well-received on Wall Street, causing the company's stock to plunge more than 15 percent in the weeks after his departure. The backlash intensified the pressure to find a CEO that would inspire investor confidence.
The initial response to Apotheker's appointment was icy. HP shares fell $1.22, or 2.9 percent, in extended trading after finishing Thursday's regular session at $42.07, down 46 cents.
Apotheker, 57, spent most of his career at business software maker SAP before being promoted to CEO in April 2008. He lasted less than two years in the position. SAP decided not to renew his contract when it expired nearly eight months ago, largely because SAP's financial performance hadn't been living up to investor expectations.
But HP's board obviously believe it found the right man for the job.
"Leo is a strategic thinker with a passion for technology, wide-reaching global experience and proven operational discipline - exactly what we were looking for in a CEO," said Robert Ryan, the lead independent director on HP's board.
HP also named another rumored candidate for the CEO position, Ray Lane, as its non-executive chairman.
Lane, 63, has been a partner at renowned venture capital firm, Kleiner Perkins Caufield & Byers, but he is best known in Silicon Valley as the former chief operating officer at SAP rival Oracle Corp.
Although he was hailed for helping Oracle recover from an accounting scandal, Lane was dumped by the company's mercurial CEO, Larry Ellison, a decade ago.
In an ironic twist, Ellison hired Hurd as his top lieutenant after publicly blasting HP's board for forcing him out of his job.
Apotheker's selection as CEO comes as a surprise. Most analysts expected to hire from within after going with two outsiders who clashed with the board. Before Hurd arrived, HP had been run by Carly Fiorina, now a Republican candidate for Senate.
HP's CEO slot is one of the most coveted and troubled in the technology world. Apotheker is the third CEO HP has had in the past decade.
Hurd was pushed out in August after a five-year reign in which he slashed costs - including cutting 50,000 jobs - and bought scores of companies to reduce HP's dependence on its cash-cow printer ink.
The company is now a player in technology services, where it competes with IBM Corp., computer networking, where it competes with Cisco Systems Inc., in addition to PCs and other technologies.
Hurd was revered on Wall Street, as HP's market value nearly doubled under his watch. But he ran afoul of HP's ethics policies, which he tightened after a scandal four years ago involving HP's board spying on the phone records of journalists and board members.
The former CEO was found to have submitted inaccurate expense reports for his dinners with an HP marketing contractor, Jodie Fisher. She accused Hurd of sexual harassment, which kick-started an investigation by HP that uncovered the expense reports. Hurd insists he didn't prepare his own reports, and that Fisher's name wasn't intentionally left off any of them.
Fisher and Hurd settled out of court for an undisclosed sum. Hurd fought with the board over its decision to publicly disclose the claim, even though it found no evidence of sexual harassment.
HP's stock has dropped 17 percent since Hurd's abrupt resignation Aug. 6, wiping out $20 billion in shareholder wealth.