Help Wanted: 2 of 4 top computermakers
seek CEOs
By Eric Auchard
NEW YORK, April 20 (Reuters) - Wanted: Compaq Computer Corp.
(CPQ - news) seeks global chief executive with the proven
leadership, marketing and technical skills to parachute in and seize
control of the world's No. 1 personal computer maker.
Internet fluency a must.
Ideal candidate must be ready to defend Compaq's share of a PC
market beset by tumbling prices, collapsing profits, well-focused
competition, and complete the transformation of the company into a broad-based supplier of not just
PCs, but also larger business computer systems and technical services.
The weekend's sudden ouster of Eckhard Pfeiffer, president and CEO, and Earl Mason, chief financial
officer, has plunged Compaq into a race against the clock for top management even as it faces financial
turmoil.
Pfeiffer was pushed out after Compaq shocked investors earlier in April by warning it expected
first-quarter earnings per share that would be half of Wall Street's expectations.
Further complicating a CEO search is the one-month head start rival computer maker Hewlett-Packard
Co. (HWP - news) has had in seeking similarly qualified candidates as chief executive and possible
chairman of the Compaq industry peer.
''There is an unprecedented competition within the potential pool of world-class candidates,'' said one
top U.S. recruiter who sought the Compaq search assignment but is not actively involved.
''There is no question Compaq and H-P are going to be competing for a group of players,'' the recruiter
said. ''There is going to be overlap in their two lists.''
Many of the possible H-P candidates have the wide knowledge of, and contacts within, the computer
industry that Compaq desperately needs to sort out conflicts between its traditional distribution network
and newer Internet sales strategies.
Wall Street analysts have speculated H-P could hire Paul Otellini, an executive vice president at Intel
Corp. (INTC - news),Ray Lane, president of Oracle Corp. (ORCL - news), Eric Schmidt, CEO of Novell
Inc. (NOVL - news), and Ed Zander, chief operating officer of Sun Microsystems Inc. (SUNW - news)
Compaq's acting chief executive described only the vaguest requirements for potential CEO
replacements in an initial telephone conference call with Wall Street analysts Monday.
''The search is being conducted worldwide for the best available candidates,'' said Benjamin Rosen,
chairman, co-founder and stand-in CEO since Sunday. He declined to comment even on whether
Compaq had ruled out internal talent in favor of pursuing only executives outside of Compaq.
''The next CEO has to understand the personal computer industry,'' said Lou Mazzucchelli, an analyst
with brokerage Gerard Klauer Mattison. ''It must be someone who can get charged up selling PCs
directly to customers.''
''That's a roll-up your sleeves problem,'' he said. ''I don't know if there's someone inside the company
ready to do that.''
A Compaq spokesman said the company had hired Heidrick & Struggles Inc., a top search firm, and
another, unidentified, recruiter to widen the potential pool of candidates for both a new chief executive
and chief financial officer.
Compaq officials declined to comment on a report in a Monday Wall Street Journal article that cited
recruiters saying a wish list might include Richard Belluzo, chairman and chief executive of Silicon
Graphics Inc. (SGI - news), and a veteran Hewlett executive once in line for that company's top job.
Others on what might be considered the ''usual suspects'' list included Richard Notebaert, the head of
U.S. phone operator Ameritech Corp. (AIT - news), and two officials of International Business Machines
Corp. (IBM - news): software chief John Thompson and services chief Sam Palmisano.
Two other candidates mentioned in the Journal suggest the broader scope of Compaq's search were
James McNerny, a top General Electric Co. executive and possible successor to Chairman and CEO
Jack Welch, and Percy Barnevik, the former head of global engineering giant ABB Asea Brown Boveri,
seen as the ''Jack Welch of Europe.''
''There are very few people in very few companies when you get to this level of search that cannot be
broken loose with the executive incentives now available in terms of bonuses and stock options,'' one
headhunter said.
Compensation for Compaq's next leader looks especially attractive since the company's stock price has
slumped 56 percent in less than three months to close at $22.75 on Monday, at a level where the stock
traded nearly two years ago.
Rosen said the CEO search was expected to take several months, and that the CEO-designate would
be consulted by the board before hiring a new CFO, ''so that they are compatible.''
On Monday, Alliant Foodservice Inc., a Deerfield, Ill.-based food distributor, named departing Compaq
CFO Mason as its president and chief executive. Mason resigned Saturday, a month after he informed
Compaq's board of his plan to head Alliant.
Compaq does not have the luxury of time. ''You better believe that H-P is going to be turning up the
heat,'' the technology industry recruiter said. ''I would think they are trying to accelerate their process.''
With $47 billion in revenues, H-P was the world's No. 2 computer maker last year, behind No. 1-ranked
IBM at nearly $82 billion. Fujitsu Ltd. is No. 3 at around $37 billion in revenues, while Compaq was No.
4, with $31 billion. Compaq, however, is the top PC maker, ahead of IBM, Dell Computer Corp. (DELL -
news) and H-P.
More Quotes
and News:
Ameritech Corp (NYSE:AIT - news)
Compaq Computer Corp (NYSE:CPQ - news)
Dell Computer Corp (N |
