Wall Street obviously likes Rosen. An important puff piece. Maybe it should eb Rosen for CEO. he appears to have lost about $135 million since CPQ dropped down from $51, so he's motivated.
April 20, 1999
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Compaq's Chairman Wields Ax
To Attempt to Protect His Legacy
By SCOTT MCCARTNEY and GARY MCWILLIAMS
Staff Reporters of THE WALL STREET JOURNAL
A year ago, Chairman Benjamin M. Rosen stood before Compaq Computer Corp. shareholders and urged them to keep the faith. He insisted that the company's troubles could be fixed and that 1998 would be remembered as "All's Well That Ends Well."
But all isn't well at Compaq. Before facing a likely tempest at this year's shareholder meeting Thursday, Mr. Rosen, with Shakespearean flair, ousted Chief Executive Eckhard Pfeiffer and once again moved to reshape the computer giant he helped create in 1982.
Compaq Faces a Tough Challenge
Compaq Computer's Board Removes Chief Executive Officer Eckhard Pfeiffer (April 19)
Even in the dizzying world of technology, the move caught many off guard. Yet to friends and longtime observers of the softspoken, understated venture capitalist, the shakeup was quintessential Rosen.
Mr. Rosen, 66 years old, is a strong advocate of independent corporate governance, who has testified before Congress on the perils of coziness between directors and CEOs. At the same time, he's a brilliant strategist who, as chairman of Compaq, has demonstrated an independent vision of where the company needs to go.
A lover of gadgets, he mixes Wall Street savvy with CalTech and Stanford engineering prowess. Before dropping the effort last year, Mr. Rosen spent millions trying to sell Detroit on a new type of engine his brother had developed. Behind the scenes, he became a technology heavyweight and a steward of developing companies, including current Internet-based start-ups like Ask Jeeves Inc.
But it is Compaq that friends say is "his baby" -- and his legacy. In 1982, a group of Texas Instruments engineers led by Joseph R. "Rod" Canion approached Mr. Rosen to seek backing for their idea to make computer components. Instead, Mr. Rosen proposed "luggable" computers. Ever since, he has been a quiet but active chairman, steering Compaq's course.
In 1992, when low-priced personal computers were emerging, Mr. Rosen secretly sent two executives to a trade show to gather independent market intelligence. Mr. Canion, a close personal friend, balked at Mr. Rosen's suggestion that Compaq needed to develop low-priced PCs. Mr. Rosen ousted him and turned the reins over to Mr. Pfeiffer, who had built Compaq's European operations and believed in cutting costs and prices.
"Ben is a guy who could hold not a single share of stock and be on a board and still do everything he had to do" about an underperforming CEO, says a Rosen acquaintance.
'Suffered Long and Hard'
Robert W. Stearns, a former Compaq strategist, says Mr. Rosen was emotionally wracked when he forced out Mr. Canion and couldn't have relished removing another executive in similar circumstances. "I think he suffered long and hard with the difficulty of his decision. These aren't easy things for Ben to do," says Mr. Stearns, who left Compaq in mid-1998 and is now a Houston venture capitalist.
But Mr. Rosen, who owns about 5.5 million Compaq shares, or less than 1%, clearly saw a company that risked missing the fast-moving Internet train, potentially leaving the world's largest personal-computer maker an also-ran.
"Ben is determined to do a couple of things in life," says Richard Shaffer, principal at the research firm Technologic Partners: "Improve his golf game, give away all his money and make sure Compaq survives him."
Mr. Rosen says he never moves hastily in major corporate decisions. "We don't act on one quarter's results," he said Monday. "There has to be a line between not waiting forever ... and acting capriciously. You try to strike a judicious balance."
Mr. Rosen's demeanor belies his obsessive determination. A frequent teller of corny jokes, he has delighted technology conferences with barroom tricks like balancing a chair on his chin. At home, he has a massive collection of technology magazines and scientific papers, and he is endlessly fascinated by new devices. Still, the natty New Yorker, who has his own airplane but no secretary, is considered the antithesis of a Silicon Valley tech nerd.
'Personal Vision'
"He was current with new technologies in the 1970s, and he's just as current today," says a longtime friend. "With that, he develops his own personal vision and sees things usually before most people do."
Since investing in Ask Jeeves, Mr. Rosen has joined the company's board and played an important advisory role, encouraging the company, for example, to license its searching technology to corporate customers, according to Dan Miller, a venture capitalist in Berkeley, Calif., who introduced Mr. Rosen to the company.
"He is a very, very hard worker -- I sometimes call him my shadow vice president of marketing," says Mr. Miller, who is temporarily acting as a marketing executive at Ask Jeeves. "He really digs in, wants to know what's going on. He wants to know about operations."
In an era when Internet investors move in and out of companies in a matter of minutes, Mr. Rosen's strategy of staying involved in his companies is refreshing, venture capitalists say. "I look at [Mr. Rosen] more as a founder of that company than as a venture capitalist," says William Hambrecht, a longtime Silicon Valley investor and founder of the investment bank Hambrecht & Quist LLC. "This is a very deep and personal commitment on Ben's part."
Mr. Rosen, who receives just $55,000 and about 31,000 shares a year as Compaq's chairman, may also feel some urgency to get the company back on track. Compaq has a mandatory retirement age of 70, and for Mr. Rosen that's less than four years away.
-- Nick Wingfield contributed to this article. |
