In his first meeting with Wall Street analysts as HP's new leader, incoming CEO, Mark Hurd, steadfastly refused to map out his plans for the company's direction. Hurd said he would spend the next few months learning about HP before he crafts a strategy for running it.
Analysts repeatedly pressed Hurd on whether he would consider breaking up HP, by spinning off either its lucrative printing group or its struggling PC division.
Hurd said he won't answer that question until he's had more time to study HP. But he did suggest he would prefer to appease shareholders looking for investment gains by improving overall performance, rather than by selling off pieces of the company.
HP chairman, Patricia Dunn, repeated the board's previous statements that its CEO switch was about changing the company's operational performance, not its strategy.
During a press event later in the day at HP's Palo Alto, California, headquarters, Hurd said that it was premature to talk about spinning off the company's businesses.
"I got here at nine o'clock last night," he said. "I didn't spend a lot of time working on spin-offs."
At Hurd's first meeting with HP executives, the topic of spinning off the company's businesses was not discussed, according to the company's executive vice-president and chief strategy and technology officer, Shane Robison.
"It's just you guys who are focused on it," he said to reporters. "It didn't come up."
Robison said his initial impression of Hurd was favourable.
"I like him a lot," he said. "He's got the right focus on operations. And style-wise, he's going to be very open in how he runs the business and communications."
Hurd, 48, comes to HP with a reputation as a cost-cutter devoted to bottom-line efficiencies. He brushed aside a question about whether he would consider workforce reductions at HP, saying he needs more time to determine that, but he said operational excellence will remain his priority.
"I believe in an execution-oriented culture," Hurd said. "I believe in setting clear goals, implementing tactical plans and holding people accountable."
HP has already shed several top executives who didn't live up to expectations: Then-CEO, Carly Fiorina, fired three major sales executives, including long-time Compaq executive Peter Blackmore, last year after HP suffered through a poor quarter. Its leadership has also cut more than 17,000 jobs from the company since it acquired Compaq in 2002.
According to HP's chairman, the board has not given Hurd a specific timetable in which he must produce results. "The biggest challenge is to get to feel at home in the culture," Dunn said.
Several of HP's remaining top managers were considered likely candidates for the CEO job given to Hurd - including storage, servers and services group head, Ann Livermore, and printing and imaging business head, Vyomesh Joshi.
Hurd deflected a question about how he will retain such executives, and about his plans for HP's senior leadership. He said he hadn't yet met the company's senior executives.
"I believe very much in organic promotion," Hurd said.
HP is paying handsomely for Hurd's services. He will receive a base salary of $US1.4 million a year and a target annual bonus of at least $US2.8 million and as much as $US8.4 million, according to an employment agreement HP included in a regulatory filing.
Hurd will also be eligible for several million in long-term performance bonuses if certain targets are met, and he has been granted options on 700,000 shares of HP stock, at an exercise price around the average trading price of HP shares on April 1, the day he officially begins his new job.
HP is also granting Hurd a $US2 million signing bonus, a $US2.75 million relocation allowance and options and stock to cover compensation forfeited by his departure from NCR.
Financial analysts generally responded favourably to Hurd's appointment, with some reservations about his relative obscurity.
At NCR, where he worked for 25 years, Hurd ran a company with annual revenue of $US6 billion. HP generated $US80 billion last year.
"[Hurd] doesn't have experience running a company of HP's size and complexity, not to mention competitive challenges," Prudential Equity Group analyst, Steve Fortuna, wrote in a research note.
"We would simply characterise the competitive landscape facing HP as brutal, with both Dell and IBM executing the enterprise hardware bookends nearly flawlessly."