Former Compaq Head Departs HP
The surprising move comes six months after completion of the milestone HP/Compaq merger, a deal that unified Capellas with HP Chairman and CEO Carly Fiorina in one front to thwart the efforts of dissident shareholder, Walter Hewlett, who wanted to block the merger.
But in the months since then, Capellas' responsibilities may have become overshadowed by Fiorina and at least one analyst indicated that today's announcement came as a logical step for a company in flux.
"I think the issue here is you have two strong people, the president and the CEO. It was clear from the start that Carly was going to run the show," Deutsche Bank analyst George Elling told internetnews.com. "I've been thinking since Day One that he would leave."
Elling said he has not seen evidence that Capellas' relationship with Fiorina had become strained. "There's no animosity. In fact when they were pitching the deal, they were very together," he explained.
Still, the analyst declined to speculate about HP's decision to make the announcement today rather than wait until Capellas was able to shore up his plans or the decision for Capellas not stay on in an advisory capacity.
Indeed, HP said in a brief statement that the president's position will not be replaced. The operating executives of the company who previously reported to Capellas will now report directly to Fiorina.
Yet, HP tried to sound conciliatory in its public remarks.
"We've reached a natural transition point. Michael made a commitment to see the merger through, and now thanks to the hard work of the entire team, we are meeting or exceeding all of our integration targets," Fiorina said in her statement.
"Michael and I have been friends and peers since long before the merger. I fully support this decision and appreciate the dedication and passion he brought to our joint endeavor. On behalf of the board, management team and employees, I want to thank Michael for his many contributions to HP," she added.
The announcement comes on the same day the Wall Street Journal reported that Capellas was considered the front-runner to become the next head of embattled Worldcom. However, XO Communications' Chairman and CEO Dan Ackerman and BellSouth's Gary Forsee have also been interviewed for the job.
"I am proud to have been associated with this company and believe -- as I have from the beginning -- that HP is redefining the information technology landscape," said Capellas. "I'm comfortable making this move because of the progress of the integration, HP's market momentum and the strength of the management team. I have tremendous respect for Carly and her leadership. I could not be more proud of our accomplishments and I have every confidence in the future success of the company."
According to SEC filings, Capellas made $1.6 million in salary and $2.1 million in "other" compensation in 2001.