The rise and dramatic fall of a corporate American `rock star'

BUSINESS ANALYSIS Hewlett-Packard's CEO comes to terms with her ignominious end - and a $21m pay-off

AS A CHIEF executive who never minded the glitz and glamour of her position, Carly Fiorina began 2005 with her usual steely-eyed gusto. Aside from continuing to chart the future of Hewlett-Packard, she had the World Economic Forum in Davos to look forward to. Once that was over, she was booked to spend a day at the White House hobnobbing with peers and the President.

And when Ms Fiorina put something into her diary, she expected it to happen. Few who cared for their jobs dared get in her way. Most famous was this from late 2001: "Buy Compaq computer today". That small chore took a little longer than she expected thanks to virulent shareholder opposition - not least from a son of an HP's founder - but she got there eventually and Compaq was hers.

Untouchable, however, Ms Fiorina was not. Even Davos was not the party she expected. Reporters quizzed her about rumours regarding the state of her relations with the HP board. They were "excellent", she fired back, but no one altogether believed her. But far worse was to come. Her appointment at the White House was for Wednesday this week - and she didn't make it. Instead she spent the day in her home in the Silicon Valley Hills, bodyguards in dark glasses stationed at the main gate.

As corporate firings go, the dumping of Ms Fiorina by the HP board this week will for ever rank among the most dramatic. It is not that Wall Street was especially surprised - on the contrary, it rewarded the board's move by pushing up stock in HP by 7 per cent. Nor were there many people willing to argue the dismissal was unfair or unwarranted.

But it was nonetheless sudden (Ms Fiorina herself could barely believe it). And above all, it was so brutally and mercilessly ignominious. Rock stars - because that is what she had become in corporate America - are not meant to be treated like that. And Ms Fiorina had become an icon for no better reason than she was a woman. She had broken the glass ceiling like no other female executive in America.

Maybe she should have heeded her father and become a lawyer. In fact, after getting her bachelor's in philosophy and history at Stanford University, she did study law but dropped out switching to business studies. Thereafter began a 20-year career in telecommunications, first at AT&T and then at the equipment business that it spun off and became Lucent.

While already admired for her hold-no-prisoners guts, Carleton Fiorina - her full name - was hardly a household name when she joined a long list of candidates to take the helm at HP in 1999. The top job at the printers and computers giant was open and the board was looking for someone to give it a new lease of energy.

Then just 44, Ms Fiorina was surely a brave choice. It was not that she was a woman - HP had a long record of nurturing female executives. More shocking was that she was an outsider being brought into a company known for promoting from its ranks. And she was an outsider with no direct experience of any of HP's core businesses.

But if the board wanted someone able to deliver an electric jolt, she seemed the right choice. She had demonstrated at Lucent that she could be charismatic and hard-nosed. Nobody minded when she began remoulding HP in her own image, casting herself in new television advertisements that had her posing outside the suburban garage where the company was first conceived in 1939.

A personality cult grow around her and there were numerous and always flattering cover articles about her in the business magazines. She waltzed through the California social circuit. At one Oscars night, the actor Warren Beatty told her he hoped his wife, Annette Bening, would play her if there was ever a film about her. Gossip has always swirled that Ms Fiorina would one day be bound for a political future.

Perhaps it was a bad omen that that first TV spot was something of a fraud. When its makers failed to win access to the real garage in Palo Alto, they had to build a fake one. But the real problem for Ms Fiorina at the outset was that she was taking charge at a particularly tough juncture for the industry. The tech bubble in Silicon Valley was about to burst, and HP's problems were serious and deep. It had a solid footing in most of the markets it was competing in, but was not dominant in any, aside from printing and imaging.

Fourth-quarter earnings in 2000 were way off target and the stock plummeted. In 2001, HP laid off 6,000 workers. Already by then, there was a division between those who had faith in Ms Fiorina and others who did not and, in fact, could not abide a style they considered imperious.

Then came her biggest gamble - her pitch in September of that same year to buy the Texas-based Compaq. Many observers as well as company insiders suggest that while Ms Fiorina eventually won the battle, she made too many enemies in the process. Worse, in the period since Compaq was finally embraced in May 2002, almost nothing she promised from the transaction has come to pass. Indeed, since then, HP's position as the top supplier in US of PCs has been stolen by Dell Computer.

In recent months, Ms Fiorina has been judged ever more harshly for her Compaq grab. The board became frustrated that Ms Fiorina seemed unable, or unwilling, to accelerate a strategy to diversify HP's portfolio of products and services and pull it ahead of its rivals. And so, on Sunday night, they met at Chicago's O'Hare airport. Ms Fiorina was not invited. She was staying nearby and on Monday the startling news was delivered: Please resign.

Ms Fiorina always shunned attention based purely on her gender. But it has always raised questions extraneous to her actual performance. Was she sacked so abruptly because she was a woman? Alternatively, did she last so long at HP because she was a woman? She would say such chatter is quite irrelevant. And so, after her firing, do most observers of the corporate scene.

"In this era," said Michael Useem, a professor of management at the Wharton School of Business, "where there is so much demand for results, boards are looking at results. A `Carl' Fiorina would have been subjected to the same pressures".

This CEO had five and a half years to achieve the desired results. And didn't quite make it. She leaves HP, however, with the promise of sleeping better than she has in quite some time. And enjoying the pay- off guaranteed by her contract, likely to be worth $21m.

A TURBULENT TENURE

July 1999: Carleton `Carly' Fiorina named chief executive of Hewlett- Packard, becoming the first woman to lead a Fortune 100 company.

September 2000: Fiorina named chairwoman of HP.

November 2000: HP's stock drops sharply when fourth-quarter earnings fall short of Wall Street expectations. HP abandons its proposed purchase of PricewaterhouseCoopers.

July 2001: 6,000 job are axed - almost 6 per cent of the company's workforce.

September 2001: Fiorina announces HP will buy Compaq.

November 2001: The family of Hewlett-Packard's co-founder says it will vote against the Compaq deal.

March 2002: HP and Compaq shareholders approve the merger, a $19bn stock deal.

November 2002: HP's president resigns and is not replaced, consolidating Fiorina's control.

August 2004: HP ousts three of its top managers and reports lower-than-anticipated profits.

December 2004: Fiorina announces that the company will buy back $2.9bn in stock and aim for consistent profit after the roller-coaster results of recent years

January 2005: The company combines its profitable printer unit with its struggling PC division.

Wednesday, 9 February 2005: Fiorina resigns as CEO and chairwoman.