Compaq CEO Hunt Narrows to Two Candidates
By Eric Moskowitz
Senior Writer
6/22/99 4:17 PM ET
The Compaq (CPQ:NYSE) CEO search is down to two candidates, and the winner could be announced as early as mid-July, according to a person familiar with the situation.
The names of the candidates are still being kept under lock and key, but Compaq Chairman and acting CEO Benjamin Rosen is considering candidates from outside the PC industry, says the source, who requested anonymity. Expect a board meeting Wednesday to push the process into high gear.
Ben Rosen
The boxmaker's chairman steps up the pace in CEO search.
Photo: Compaq
Compaq watchers say to keep an eye on Intel's (INTC:Nasdaq) Paul Otellini, an executive vice president and general manager of Intel's architecture business group.
Other candidates include Ed Zander, COO of Sun Microsystems (SUNW:Nasdaq), and Sam Palmisano, IBM's (IBM:NYSE) head of global services. "Compaq has never set a time line for the search and doesn't comment on rumors or speculation," said a spokesman for Compaq. The possible candidates didn't immediately return calls seeking comment.
And then there's Oracle (ORCL:Nasdaq) COO Ray Lane, the perpetual candidate whose very mention in job-hopping contexts draws the ire of many Wall Streeters. Lane, who is out of the country this week, has said time and time again that he isn't going anywhere. He told an Oracle spokeswoman to repeat this stance Tuesday.
Rosen may be feeling intense pressure from shareholders to step aside. After he ousted CEO Eckhard Pfeiffer nine weeks ago, Rosen was expected to spend at least until the end of summer to find a new CEO.
But he has to hurry since Hewlett-Packard (HWP:NYSE) is also looking to finish its CEO search, which is down to three candidates -- H-P Enterprise Computing Solutions CEO Ann Livermore and two external candidates -- according to Reuters. There are so few qualified outsiders in circulation, it seems, that Compaq and H-P may be interviewing the same shallow pool of candidates.
"H-P and Compaq are very big ships, and the emerging executives out there would prefer to run smaller ships," says Daniel McKelvey, a money manager at Forte Capital. "Executives today prefer to have more control, fewer people watching over them and the opportunity to make more money over the long term. The Internet is basically taking the cream of the crop."
Rosen, who said last week that Compaq would cut $2 billion in operating costs and take a large reorganization-related charge in the third quarter, didn't immediately return calls seeking comment.
Of course, Rosen could surprise the Street by installing someone from outside the tech sector. But Compaq investors probably wouldn't have the patience to wait for a Lou Gerstner-like CEO to learn the complexities of Compaq's tech culture.
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