March 16, 2005 4:12 PM PST
HP struggles, sees some improvement post-Fiorina
"We are in a sensitive period and at a sensitive junction at HP to select new leadership," said Patricia Dunn, HP's chairwoman. "It is difficult for the board to communicate everything...but I want to assure you we are seeking (a CEO who will drive) value creation over the long term."
Although the company declined to say when it expects to name a new chief executive, Dunn said she is satisfied with the board's current progress in selecting a new CEO and that it's on track with an internal time line it had set.
Despite the absence of a CEO since early February, HP posted first-quarter results that were stronger than analysts had expected, noted Bob Wayman, HP chief financial officer and interim chief executive.
"We have been able to execute against our strategy since the announcement (of Fiorina's departure)," Wayman said. "This represented a solid team effort and demonstrated the solid breadth and depth at HP."
Nonetheless, Wayman noted that the company has not been consistent with its performance and has fallen short in areas. He reiterated the company's stance that it wants to achieve sustainable growth, lead in new markets and leverage growth in all of its business units.
Investors, however, questioned the company's ability to accomplish its goals and questioned Fiorina's $21.4 million severance package.
"It seems the worse you do, the more money you make," one investor said.
Dunn responded that Fiorina did not have a contract at HP and received the same severance plan "as everyone else at HP." The bulk of Fiorina's severance package included two-and-half times her salary and bonus from the previous year, as well as an additional bonus for the current period.
"The board takes the view that it's better not to have protracted negotiations as people leave the company," Dunn said.
But she noted that the board will re-examine their severance policy in the future and evaluate whether they are "payments for failure."
Shares of HP were virtually flat in afternoon trading at $20.22 a share, up 8 cents from the previous day's close.
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