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Compaq's woes continue

Compaq's woes continue

Compaq continues to struggle after its dismal fourth-quarter results with the announcement of more management losses, structural changes, loss of market share and reports of stock impropriety filtering through to Australian resellers.

Following the ousting of CEO Eckhard Pfeiffer and chief financial officer Earl Mason, general manager of sales and marketing Mike Heil has resigned to become the CEO of start-up data networking company CommcoTec, according to an internal Compaq e-mail.

The mounting pile of executive scalps and Compaq's poor financial showing has forced Compaq chairman and acting CEO Ben Rosen to re-evaluate the vendor's structural integrity.

According to the e-mail, a decision has been made for "all major geographic regions and corporate marketing to report directly to the office of the chief executive".

Other management positions look potentially fragile with Securities and Exchange Commission (SEC) filings indicating Compaq executives sold massive amounts of shares before Compaq's financial results caused the stock to tumble to half its value.

Hugh Smith, managing director of Western Australian reseller ComputerCorp, believes that Pfeiffer's unceremonious exit was mostly due to "suggestions of insider trading where top executives sold over $US50 million worth of shares". Although Smith understands the concept of CEO responsibility, he suggests that the corruption is endemic and unlikely to settle with Pfeiffer's removal and Compaq's ailing position.

According to recent figures from industry analyst IDC, Compaq's position in its traditionally strong market segments is waning, and although it still rests at the top of the pile in terms of global PC sales, its US growth rate of 10 per cent is significantly less than some of its competitors.


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