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The man who really holds Compaq's reins

Don't tell Compaq chairman Ben Rosen that board members are complacent: He's been instrumental in replacing two CEOs at the computer giant.

Don't tell Compaq chairman Ben Rosen that board members are complacent: He's been instrumental in replacing two CEOs at the computer giant.

Benjamin Rosen From his office in Manhattan, the 65-year-old Rosen today reentered the converging spotlights of Silicon Valley and Wall Street after the boardroom coup that led to the resignation of Eckhard Pfeiffer as chief executive of the leading personal computer manufacturer.

"Rosen seems to be the mystery figure," said Roger Kay, PC analyst at International Data Corporation. "For years, you don't hear from him."

Like many other analysts, Kay said that grumbling from the financial community may provided the final incentive to act. Rosen, he said, probably "saw clouds growing on the horizon, so he handed his golf club back to his caddy and picked up a cell phone."

Eight years ago, the same man installed Pfeiffer at the helm of his Houston-based company after helping to remove Rod Canion as chief executive. Canion lost his job after Rosen launched "an elaborate secret project," as Fortune magazine once put it, to show that Compaq was spending too much money to build PCs.

This time, it was Pfeiffer's turn to look down the wrong end of Rosen's barrel. "The computer world is in a lot of turmoil," Rosen told Reuters in a phone interview today. "The issues are very complex, and we felt we really need a change in the leadership in order to keep our position as the industry leader."

Rosen will become acting CEO, leading a three-member team that will run the PC maker until a successor is found.

Still, even as he engineers such high-level maneuvers, Rosen maintains a low profile. He became Compaq's chairman in 1983, and he remains a director of privately held technology companies Capstone Turbine and Ask Jeeves, according to Compaq's proxy. Rosen also is vice chairman of the board of trustees at the prestigious California Institute of Technology.

He has helped fund companies including Lotus Development and Silicon Graphics and has worked as a Wall Street analyst. "He works from a lonely office high up in New York's Met Life Building," Fortune wrote in January 1997. "He visits Houston only monthly but stays on top of what's happening in the industry by talking to friends like Paul Allen and by traveling around the world to give speeches on behalf of Compaq."

Rosen's remarks rarely appear in Compaq's public statements. The latest was in February, in which he said he was "delighted" that the PC maker had become a sponsor in a Professional Golf Association event in New Orleans. His comments also appeared in the June 1997 announcement of Compaq buying Tandem.

Rosen receives an annual retainer as chairman of $55,000, according to the company proxy. But most important, he holds 5.45 million shares in Compaq, second only to Pfeiffer among all executive officers and directors as a group.

Rosen will face yet another formidable challenge this week when Compaq's stockholders meet Thursday in Houston. One question on their minds: why the PC maker's stock is trading near a 52-week low.

News.com's Michael Kanellos contributed to this report.