Hewlett-Packard Co. (HPQ) added three directors, including former Microsoft Corp. (MSFT) software head Ray Ozzie, as Chief Executive Officer Meg Whitman tries to bolster sales with new technology and services amid a global PC slump.
Ozzie will be joined on the board by Jim Skinner, the former CEO of McDonald’s Corp. (MCD) and current chairman of Walgreen Co. (WAG), and Dob Bennett, the ex-CEO of Liberty Media Corp. (LMCA), the Palo Alto, California-based company said today. The additions expand the board to 12 members from nine.
Hewlett-Packard is shoring up its board following a shake-up in April when Ray Lane stepped down as chairman after an $8.8 billion writedown of a company acquired on his watch. With the third board overhaul since 2011, Whitman is gaining expertise in software and marketing as she expands in mobile computing to reach users who are abandoning PCs for smartphones and tablets.
“It doesn’t hurt to have a software guru on the board,” said Brian White, an analyst at Topeka Capital Markets who has a sell rating on the shares and a $12 target price. “Software is becoming more important. That’s one area that HP really needs to beef up.”
Lotus Creator
Ozzie has a long and distinguished history in the computer industry, though his tenure at Microsoft was relatively brief. He is best known as the creator of Lotus Notes, a pioneering e-mail system that was acquired by International Business Machines Corp. He later founded software maker Groove Networks, which Microsoft acquired in 2005.
When Microsoft co-founder Bill Gates announced in 2006 that he would step down from his day-to-day role, Ozzie was one of two executives tapped to chart the course of the world’s largest software maker. Yet by the time Ozzie left Microsoft in 2010, he had been less visible and his departure wasn’t considered a surprise.
More recently, Ozzie has been running Talko Inc., a cloud computing company he founded.
“As we move forward with our turnaround, it’s a huge benefit to be able to get advice from a board made up of such experienced business and technology leaders,” Whitman said in the statement. “For their part, Dob, Ray and Jim have just about seen it all during their careers.”
Additional Directors
The company will continue seeking additional directors and a nonexecutive chairman in the coming months, Ralph Whitworth, interim chairman, said in a blog post.
Whitworth became temporary head of the board in April in a shake-up that also led Lane’s exit and the departures of directors G. Kennedy Thompson and John Hammergren. Lane gave up his chairmanship after investors re-elected him in a narrow majority of votes, issuing a rebuke of his oversight of the botched acquisition of software maker Autonomy Corp.
Skinner was CEO of McDonald’s from 2004 to 2012, and oversaw a sharp rise in the company’s stock. He led the world’s largest restaurant chain through the U.S. economic recession by scaling back new store openings and expanding the menu to include premium coffee drinks to lure higher-income consumers while introducing healthier options like oatmeal and smoothies.
Bennett was CEO of Liberty Media from 1997 to 2005, and previously served as finance chief at the company, which invests in a variety of entertainment and sports ventures. He also led Liberty Media’s initial public offering in 2001.
‘Strategic Sense’
Of the three, Ozzie is the most welcome addition, according to Jayson Noland, an analyst at Robert W. Baird & Co. Ozzie became chief software architect at Microsoft in June 2006, directing development of new versions of the company’s operating systems and services, according to the statement. Before that, he was chief technical officer.
“It’s hard for a few new directors to make a big difference in a company this size,” said Noland, who has a neutral rating on the shares and a $25 target price. “Ray Ozzie makes the most strategic sense. Software is certainly a key initiative.”
Lane joined the board in November 2010 in the aftermath of the departure of CEO Mark Hurd, who left that August after the board said he violated Hewlett-Packard’s code of business ethics. Lane’s reign came to be associated with the ill-fated tenure of CEO Leo Apotheker, who was ousted after 11 months on the job; strategy shifts, such as a flip-flop over whether to sell the PC division; and acquisitions, including Autonomy, that did little to revamp Hewlett-Packard.
A board shake-up in January 2011 added executives with ties to Apotheker, aiming to quell criticism over they way directors had handled Hurd’s departure.
Hewlett-Packard shares have rallied 85 percent this year amid tentative signs that Whitman is making headway in her efforts to reignite growth. They rose less than 1 percent to $26.38 at the close in New York.
Source:Bloomberg
