Fiorina is named to run Hewlett-Packard

No. 2 computer maker taps Lucent official as president, CEO

July 20, 1999|By BLOOMBERG NEWS

PALO ALTO, Calif. -- Hewlett-Packard Co. yesterday named Carleton Fiorina, a Lucent Technologies executive, as president and chief executive, choosing a woman with ties to telecommunications companies to lead the No. 2 computer maker.

Fiorina succeeds Lew Platt, 58, who will remain chairman until he retires Dec. 31. Fiorina, 44, becomes one of three women heading Fortune 500 companies. She'll run a Palo Alto corporation that helped create California's Silicon Valley and now has $47 billion in annual sales.

Fiorina, who handled about $20 billion in annual sales of equipment to phone companies at Lucent, will be the first CEO from outside Hewlett-Packard.

Platt and the board wanted new blood to spur sales growth, which has slowed in recent years. As does rival Sun Microsystems Inc., Hewlett-Packard wants to sell more computers to companies that do business online and to telecommunications providers that offer Internet access.

"This is an absolutely phenomenal hire," said Greg Geiling, an analyst at J. P. Morgan Securities Inc. in New York, who rates Lucent shares "a buy."

"She has been one of the most important executives at Lucent for the past few years."

Shares of Hewlett-Packard rose $2.25 yesterday to close at $116.25, after touching a record $118.4375. They've surged 70 percent this year. Shares of Lucent, of Murray Hill, N.J., fell $2.1875 to $76.25.

Hewlett-Packard also named Richard Hackborn, 60, a member of its board, as nonexecutive chairman to succeed Platt at year's end. Fiorina said she persuaded Hackborn to stay on to advise her. He retired as a Hewlett-Packard executive vice president in 1993, after 33 years with the company.

Platt and other board members chose Fiorina, a group president at Lucent, in a unanimous vote after a 4 1/2-month search in which they considered 100 candidates.

Among those Fiorina beat out is Ann Livermore, 40, chief executive of Hewlett-Packard's enterprise computer group, its largest unit. That raised questions about whether Livermore will remain at Hewlett-Packard. "My intent is to stay," Livermore said. "I think she's going to be a great leader for our company."

Livermore is one of the architects of the company's new "e-services" initiative, which is aimed at selling more computers to online businesses.

Fiorina endorsed the strategy.

"We're on the right path [with e-services]," the new chief executive said.

Fiorina headed Fortune magazine's 1998 list of top powerful businesswomen. Her unit at Lucent accounted for about 60 percent of the company's total revenue.

Fiorina joins two other female CEOs of Fortune 500 companies: Jill Barad at toy maker Mattel Inc. and Marion Sandler at Golden West Financial Corp., the third-largest U.S. savings and loan.

A philosophy and history major who stumbled into the business world after dropping out of law school and spending a short time as a teacher, Fiorina had been at AT&T Corp. and Lucent for more than 20 years. She is credited with building Lucent's business outside the United States.

Fiorina made her name at Lucent, AT&T's former equipment business, when Chief Executive Officer Rich McGinn asked her to manage Lucent's initial public offering, a final step in its split from AT&T. The project was a success. The $3 billion IPO, completed in April 1996, was the biggest in the country at the time.

Lucent shares have climbed almost 12-fold since.

Fiorina said much of her pay will be based on Hewlett-Packard's performance, a practice common to executives at high-technology start-up companies. She also will be compensated for stock options left at Lucent.

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