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Monday, September 25, 2006

Who Will Replace Mark Hurd As HP CEO?

One of the great mistakes made by Hewlett-Packard in it board spying probe is that Mark Hurd, the CEO, was appointed Chairman, effective in about three months. The announcement was made before it was disclosed the Hurd was actually had a part in the investigation. Now, the company's Chairman, Patricia Dunn, has resigned as of yesterday, and Hurd has taken that job in addition to being CEO.

Hurd has readily admitted that he had received a report about the investigation and some of the tactics used as early as March, according to The Financial Times. He indicates that he did not read it, but not everyone will believe that.

While it remains unclear exactly what Hurd did, he hardly has clean hands.

Hurd may well have to leave Hewlett-Packard if the trail to him becomes more obvious. If he did know about the private dectectives, phone records, and news reporter stings, the remaining members of the board may have to let him go. He has clearly turned the company around, but that may not be enough if he had a role in or was aware of any illegal activity.Who would be the candidates to replace Hurd? Going outside the company could be time consuming and would mean bringing in another CEO who has to learn the company's businesses and culture. So, it would seem likely that a replacement for Hurd would be an insider. An insider that the board had convinced itself had no role in the spying scandal.

The most likely new CEO of Hewlett-Packard would probably come from this list:

Gilles Bouchard. He has been HP's CIO and runs global business operations. He has been with the company since 1989, so he knows that culture well.

Vyomesh (VJ) Joshi. He runs the $26 billion printer and imaging group. He is an engineer, and several engineers have run HP. He has been with the company since 1980 and sits on Yahoo!'s board.

Ann Livermore. She was considered a candidate for the CEO's job before it went to Hurd. She runs HP's $32 billion tech solutions group. She joined HP in 1982.

Lawrence T. Babbio, Jr. A director of HP since 2002, he is the No.2 executive at Verizon.

If HP needs a new Chairman and CEO, the job may be split between two people, as it was until recently. But, the candidates would still be likely to come from this list.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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