Monday, August 09, 2010

The Race to Replace HP's Hurd

By Eric Jackson
RealMoney Contributor

8/9/2010 10:00 AM EDT
Click here for more stories by Eric Jackson

After Friday's shocking revelation that Mark Hurd would be stepping down as Hewlett-Packard (HPQ -commentary - Trade Now) CEO after failing to uphold the company's standards of business conduct, the handicapping started for who would replace him.

Cathie Lesjak, the company's current CFO, has stepped up as interim CEO while the board initiates a search for a permanent replacement. She was quick to point out that she is not in the running to become CEO full time.

The board said it would consider both inside and outside candidates.

To understand who HP's board might pick as Hurd's successor, you need to look at the backgrounds of those on the newly created search committee. They are:

Marc Andreesen
One of the best-known and admired young execs in the Valley, Marc Andreesen co-founded Netscape. He runs his own venture-capital fund now and sits on the boards of eBay (EBAY - commentary -Trade Now) and Facebook, in addition to that of HP. Andreesen sold his former business, Opsware, to HP in 2006 for $1.6 billion, so he is familiar with the post-Carly HP and only joined the board last year. In an article for TheStreet about a year ago, I expressed concern about Mark Hurd's excessive compensation and perks and wondered whether Andreesen would be sufficiently independent to stand up to a guy who gave him a lot of money for his company. Andreesen, though, was the first HP director talking publicly with the media on Friday about Hurd's departure, indicating he played a key role in that decision. This means he'll likely also be critical in his role on the search committee.

Lawrence Babbio Jr.
Formerly President of Verizon (VZ - commentary - Trade Now), Babbio joined the HP board in 2002 after Compaq merged with HP. He had been on Compaq's board since 1995, so he's familiar with the PC part of the business (headed by internal candidate Todd Bradley).

John Hammergren
Hammergren is Chairman and CEO of McKesson (MCK - commentary - Trade Now) and joined HP's board in 2005, when Hurd was hired. Hammergren joined McKesson 11 years ago -- three years before he was appointed CEO. So, he might look at someone like Todd Bradley (who came over from Palm (PALM -commentary - Trade Now) five years ago) as a "mini-me" suited to taking the reins.


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