Carly Fiorina, Hewlett-Packard’s newly-appointed CEO, held court for Wall Street analysts last week and tried to put the brakes to her company’s sliding stock price.
In a conference call, Fiorina — who took the job in July for a compensation package valued at a hefty $80 to $90 million (US$) — told analysts that HP’s fourth-quarter revenue could fall short of earnings estimates.
Fiorina added that any potential shortfall would be due to the poor sales in HP’s computer-server line and to a components shortage triggered by the Taiwanese earthquake.
After acknowledging the possibility of a disappointing fourth quarter, Fiorina then went on to do what all good corporate politicians do: Sprinkle sunshine.
Fiorina told the analysts that HP’s printer and PC business was chugging along while poor sales performers — who had already been removed — were responsible for the poor performance of HP’s N-Class computer servers. She added that the Palo Alto, California-based company is also changing the pay-incentive program for its remaining sales force.
The sales force’s new compensation plan is tied to performance, which differs from Fiorina’s personal incentive program in one significant way: Hers isn’t. Fiorina’s deal will grant her the equivalent of 580,000 restricted HP shares over three years — a block of stock worth $66.1 million — regardless of HP’s performance.
Nonetheless, during the conference call, Fiorina revealed a new chatty side that hasn’t been seen since she succeeded Lewis Platt and took the company reins.
Some analysts point out that Fiorina’s sudden availability was simply a necessary move in light of HP stockholders’ recent disenchantment with their shares — which have plummeted about $9 a share in the last eight trading days.
However, Fiorina put a positive spin on the situation by claiming that HP is using the weakness in its stock price as an opportunity for the most aggressive buyback of its own shares in 12 years.
Calm Before The Storm
During the meeting, Fiorina reported some shifting of top management from one slot to another. However, it was something else that she said which leads me to believe that we are sitting in the calm before a major corporate hurricane.
Fiorina alluded several times to the fact that she intended to change HP’s corporate culture — which has been conservative — to a faster-paced, more liberal culture.
She even said that sales staff who met or exceeded their sales goals would no longer be required to drive a Ford Taurus, which had been the official company car.
The Earthquake Is Coming
It is often the innuendoes and things that are left unsaid that telegraph the future actions of the elite who run high-tech corporations like HP.
For my money, I’d say if you’re a HP stockholder or worker, fasten your seat belts.
The shake-up is about to begin.
What do you think? Let’s talk about it.