As the board of directors at Hewlett-Packard reportedly considers firing CEO Léo Apotheker today, it may also want to think about installing a revolving door to the corner office.
Apotheker, once the CEO of German software maker SAP, has been on the job for less than a year—still enough time, as Bloomberg News lays out, for him to slash sales forecasts three times and see the stock plunge more than 40 percent. If replaced, he would be just the latest in a long list of HP executive comings and goings. Former eBay CEO and California gubernatorial candidate Meg Whitman, an HP director who is being mentioned as a possible replacement for Apotheker, would be the fifth chief executive for the iconic Silicon Valley company since Carly Fiorina was fired in January 2005.
Before Apotheker took over last November, Cathie Lesjak served as interim CEO for a few months. Lesjak stepped in after the abrupt ouster of Mark Hurd in August of last year in the wake of a sexual harassment investigation that uncovered what HP described as some expense report discrepancies. Hurd had been CEO since 2005, when he succeeded Robert Wayman, the HP veteran who briefly served as interim CEO after Fiorina’s departure.
All these CEO changes carry costs. Apotheker, for example, announced last month that the company would spin off its PC business, discontinue its tablet computing line, and dump the WebOS mobile operating system. HP’s TouchPad tablet had launched less than two months earlier, and it was just last year that HP, under Hurd, paid $1.2 billion to buy Palm, mostly to acquire that WebOS operating system. If Apotheker is booted, what happens to his plan for the PC and tablet businesses?
Above and beyond the uncertainty HP has created about its fundamental strategy and direction, the company has also been paying its ousted executives handsomely. If Apotheker leaves, he would be walking away with at least $9.4 million for his brief tenure—“a killing,” as CNBC’s Herb Greenberg calls it in a post on Google+.
Hurd’s severance package was reported to be in the range of $40 million to $50 million, though Hurd waived much of the compensation he was owed in settling a lawsuit HP brought to try to stop him from joining rival Oracle. And Carly Fiorina got a $21 million severance package (and also left with $21 million more in stock options and pension benefits). Both Hurd’s and Fiorina’s golden parachutes led to shareholder lawsuits against HP.