Fiorina steps down at HP

Carly Fiorina ends reign as CEO and chairman. CFO Robert Wayman takes over as interim chief executive. Images from Fiorina's reign

Carly Fiorina, the embattled leader of Hewlett-Packard, stepped down as chairman and CEO on Wednesday as HP tries to redefine itself for a new era.

Carly Fiorina

The company said the change was effective as of Tuesday, when the board made its final decision to ask Fiorina to step down. Robert Wayman, HP's chief financial officer, has been named interim CEO and has been appointed to the board. (To read Wayman's memo to HP employees, click here.) Patricia Dunn, who has served on the board since 1998, has been named chairman.

Fiorina's severance package is $21.1 million, a sum that includes stock options and a cash payment based on her salary and bonus, said HP spokeswoman Monica Sarkar.

According to the company, the departure stemmed from disagreements over how to execute the company's strategy.

"The differences came down to Carly catalyzing the transformation of HP. She did that in remarkable fashion and executed the merger with Compaq in superior fashion. But looking forward, we think we'll (need a CEO with) hands-on execution," Dunn said on a conference call.

Fiorina at CES 2005,
and other images.

Dunn said that the board had been discussing Fiorina's performance for several weeks and had sought outside advisers--including longtime counsel Larry Sonsini--to help the directors make their decision. She added that no single event had triggered her departure.

Fiorina acknowledged discord with the company's board.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," she said in a statement.

HP is scheduled to report its fiscal first-quarter results on Feb. 16. The company said Wednesday that results will be in line with expectations.

The departure of Fiorina, who arrived at the company in 1999 from Lucent Technologies, comes as HP struggles to achieve consistent growth in its financial performance, particularly in its enterprise group. The company reorganized last month, combining its PC and printer units.

Fiorina has resisted calls to break HP, a Silicon Valley icon, into two separate companies, with one focused on business customers and another focused on consumers. Poll

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HP's merger with Compaq Computer, which was spearheaded by Fiorina, has also been criticized. Although the merged company has managed to wring out costs by combining operations, it has lost market share in certain areas, according to analysts.

Just two weeks ago, HP denied reports that it was planning to redistribute some of Fiorina's day-to-day responsibilities.

Walter Hewlett, a former HP director and son of a company co-founder, said in a phone interview that he was surprised by the decision.

"I know she's been under a certain amount of criticism, but (this) is somewhat unexpected," said Hewlett, who

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