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HP closer to choice of chief executive

Mon Mar 28,11:01 AM ET   Technology - SiliconValley.com

SOURCE: GROUP WAS TOLD CAPELLAS WON'T GET JOB

By Therese Poletti, Mercury News

Hewlett-Packard appears to be narrowing its list of candidates to succeed
ousted Chief Executive Carly Fiorina and could name a new CEO within the
next few weeks.

The Palo Alto computer giant's top technology strategist, Executive Vice
President Shane Robison, recently met with a small group of employees and
told them he wasn't a candidate for the top job, according to a person
familiar with the conversation.

Robison also told the group that Michael Capellas, the former HP president
who is now CEO of MCI, wouldn't get the job. Capellas worked briefly at HP
when Fiorina purchased his company, Compaq Computer, in 2002, and he has
been frequently mentioned as a candidate because of his operations
experience and familiarity with HP.

Separately, HP board member George ``Jay'' Keyworth expressed optimism
about the progress of the CEO search in a speech last week to more than 700
HP engineers and technical professionals at a company conference in
Phoenix.

Two people familiar with Keyworth's remarks said he told the group that a
new CEO would be named within two or three weeks.

Another person who attended the meeting said Keyworth, who is HP's longest-
serving board member, was optimistic but did not give any kind of time
frame in his remarks and his comments could be ``open to interpretation.''

The individuals who spoke to the Mercury News asked not to be named for
fear of reprisals from HP, which restricts employees from talking to the
news media without company permission.

Neither Robison nor Keyworth responded to interview requests. A Capellas
spokeswoman couldn't be reached for comment late Friday.

HP spokesman Dave Berman, who attended the Phoenix meeting, declined Friday
to discuss Keyworth's speech. ``That was an internal meeting, so I can't
talk about what went on there,'' he said.

Berman also declined to discuss the details of Robison's remarks. He said
Robison frequently meets with groups of HP employees, particularly groups
of engineers or technical people.

``Fundamentally, he has said what Patricia Dunn said at the stockholders'
meeting, that the search is progressing and they are satisfied with the
search. That is about all we are saying about it.''

Dunn is chairman of HP's board and is leading the search effort.

At HP's annual shareholder meeting March 16 in Chicago, Dunn told
shareholders that she would not answer any questions about the CEO search,
but noted that the company was where it expected to be at this time in the
search.

Shortly after the shareholder meeting, Chief Financial Officer Bob Wayman,
who is serving as interim CEO, met with employees at HP's Cupertino campus
and reiterated Dunn's remarks.

Internal, external

A number of people, internal and external, have been mentioned as possible
successors to Fiorina, who transformed the structure of HP's business
through the Compaq merger even as she alienated many workers and failed to
deliver strong financial results.

Some employees have been rooting for Vyomesh Joshi, the HP executive vice
president who heads the company's flagship printing and imaging business
and recently took on responsibility for personal computers. The printer
business has continued to generate the bulk of HP's profits, even after the
company's merger with the more computer-focused Compaq.

Early in his career at HP, Joshi led the team that invented the first color
inkjet cartridge. And his engineering roots appeal to many employees since
HP was always run by engineers until Fiorina joined the company in 1999.

Ann Livermore, the HP executive vice president who oversees the services
and the corporate server business, is also an internal contender and was a
finalist in 1999 when HP's board ultimately chose Fiorina.

Outside candidates whose names have surfaced in recent weeks include W.
James McNerney, chief executive of 3M, a diversified Minnesota company that
makes everything from Scotch tape to liquid-crystal displays. A few years
ago, and again in the past month, McNerney has also been mentioned as a
possible contender for the CEO job at Boeing.

Through a spokesman, McNerney has repeatedly indicated that he is happy at
3M and has no plans to leave.

Belluzzo mentioned

Rick Belluzzo, a former HP executive who was once a protege of HP board
member Dick Hackborn, has also been mentioned as a possible candidate.
Belluzzo was seen as the top contender for the CEO job when he left HP in
1998 to run SGI, a Mountain View maker of high-performance computers.

He abruptly left SGI in 1999 and joined Microsoft as a group vice president
and eventually became president and COO. He left Microsoft in 2002 and is
now chief executive of Quantum, a San Jose maker of storage tape drives.

Asked about the HP job in an interview earlier this month, Belluzzo said,
``I'm pretty focused on Quantum.''

Symantec CEO John Thompson, a former top IBM executive, has also been
mentioned as a candidate. Last month, Melissa Martin, a Symantec
spokeswoman, declined to comment on ``speculation'' about Thompson.

Business Week recently reported that other potential candidates include
Intel Executive Vice President Sean Maloney and IBM Senior Vice President
John Joyce.

The Mercury News strives to avoid use of unnamed sources. When unnamed
sources are used because information cannot otherwise be obtained, the
newspaper generally requires more than one source to confirm the
information. Contact Therese Poletti at [log in to unmask] or at
(415) 477-2510.

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