Palm CEO admits mistakes

Carl Yankowski begins a shareholders meeting on a conciliatory note, mindful that virtually everyone in the crowd had lost a bundle on his company's stock.

2 min read
SANTA CLARA, Calif.--Palm CEO Carl Yankowski began the annual shareholders meeting on a conciliatory note Thursday, mindful that virtually everyone in the crowd had lost a bundle on his company's stock.

Although noting that other companies have suffered in this year's tough economy, he acknowledged: "We also made mistakes."

Palm shares, which started the year at $28.75, closed Thursday at $2.09. The stock was up 58 cents for the day--a nearly 40 percent jump--but the shares have lost more than 90 percent of their value this year.

Yankowski promised shareholders that the company is on the road to recovery. "We know where we erred...We know what needs to be done to turn the corner...and we've begun."

After a brief recounting of the recent past and what actions Palm has taken, company executives took a shot at rival Microsoft and asserted that Palm is still the leader with both corporations and consumers. At the same time, company executives conceded that Microsoft has managed to convince many people otherwise.

Starting Friday, Palm plans to hit back with an ad campaign that plays off the "Software matters" slogan that Microsoft is using to support its launch earlier this month of the Pocket PC 2002 operating system. Palm's ad, aimed at corporate technology buyers, notes that "Software matters," "Users matter" and "CIOs matter." The ads also claim that Palm is the leader in all those areas.

Palm plans to follow up with an ad campaign on cable TV geared at generating holiday sales among consumers. Those ads will focus on the value of the postage stamp-size Secure Digital expansion slot that is a part of Palm's m125 and m500 series.

Despite laying out Palm's short-term road map, Yankowski faced tough scrutiny from several of the individual shareholders who attended the meeting, held at the Hilton Santa Clara. None of Palm's institutional investors were in attendance, according to the company.

Some of the harshest comments came from Joan Keil, who said she was a former employee and current shareholder disappointed with a lack of oversight by the company's management, which she said has failed to deliver on its grand plans.

"Innovation without execution is hollow," Keil said.

Shareholder Ted Gacksetter said that Hewlett-Packard CEO Carly Fiorina returned a bonus after HP failed to meet expectations and asked why Yankowski hadn't done the same. Yankowski countered that Palm executives only get bonuses when the company is profitable, which it has not been in recent quarters.