Hewlett-Packard Co. confirmed yesterday that former NCR Corp. CEO Mark Hurd will replace deposed Carly Fiorina as its new chief executive officer and president. Hurd is expected to take over HP on Friday.
Patricia Dunn, HP's non-executive chairman, said in a statement that the board unanimously chose Hurd because of his leadership skills and his success in turning around NCR after he took over that company in 2003.
"Mark came to our attention because of his strong execution skills, his proven ability to lead top performing teams and his track record in driving share holder value," Dunn said.
But many industry observers expressed surprise at HP's choice. Hurd is a Silicon Valley outsider -- and now he's running one of the valley's marquee companies.
"I am surprised but also heartened by this choice," said Rob Enderle, principal analyst with the Enderle Group in San Jose, Calif.
Hurd does not have the kind of star power Fiorina brought to the position, Enderle said. But he brings a strong operational background to the job and will be able to execute on the strategy developed by Fiorina.
By choosing Hurd, HP is signaling that it is not looking for a new vision, but for someone who can move the existing business forward, Enderle said. "He is not a visionary person," he said. "He is a nuts-and-bolts guy."
Hurd may be more of a throwback to the old HP, said Dave Passmore, research director with Midvale, Utah-based Burton Group. "He may be a better fit with the original HP culture of engineers that did not grab the limelight but let the technology speak for itself," Passmore said.
According to documents filed with the Securities and Exchange Commission yesterday, Hurd will receive a base salary of $1.4 million and bonuses of up to $2.8 million for meeting performance goals, as well as a $2 million signing bonus and $2.75 million relocation allowance. He will also receive options for 700,000 shares of stock that will vest over four years. Hurd was also granted 400,000 shares of restricted stock valued at $8 million and an option for an additional 450,000 shares valued at $2.7 million to make up for lost income from NCR.
As he takes over HP, Hurd will face a number of challenges. The organization is still working through cultural divides left over from the merger with Compaq Computer Corp. And the company lacks a cohesive identity, said Zeus Kerravala, a vice president with Boston-based Yankee Group.
In addition, Hurd has spent his entire career at NCR, based in Dayton, Ohio, far from the high-tech hub of Silicon Valley. His midwestern resume may present challenges in the often-insular culture of Silicon Valley, Kerravala said.
"The perception is that if you are not out of the Silicon Valley model, you may not be perceived as strong," Kerravala said. "That will be one of his biggest challenges to overcome right away."Fiorina steps down -- HP seeks change