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Léo’s Reign Has Minutes to Run

He will be ousted in absentia since nobody seems to know where he is

Léo Apotheker's brief inglorious reign at HP only has hours left to run insiders say.

He will be ousted in absentia since nobody seems to know - or care - where he is. He will be the third HP CEO in a row to be fired and the shortest lived.

The board's next available window to announce the coup is after the market closes today unless the crisis slops over into Friday.

AllThingsD blogger Kara Switcher jumped the gun and said at noon Thursday ahead of a vote by the full HP board that one of its own, ex-eBay CEO Meg Whitman, would replace Léo permanently, not as a placeholder for some looked-for messiah.

Given her track record Whitman may have the stuff to turn HP around but like Léo doesn't have credentials. The board's other choices were reportedly insiders, PC chief Todd Bradley and printing chief Vyomesh I. Joshi.

The board met yesterday in committee reportedly trying to figure out how the company managed to get into the nightmarish pickle it finds itself in.

Sources said the directors leaned to the conclusion that they were sold a bill of goods by Léo and his two henchmen, HP's non-executive chairman Ray Lane and HP's chief strategy and technology officer Shane Robison.

It was reportedly those three who persuaded the board to rubberstamp the appalling August 18 announcement that HP would - maybe yes, maybe no, who knows, we'll see in the next 18 months - spin off or sell HP's hard-won $41 billion PC unit, abort its short-lived webOS operation and buy a largely unknown British software company for an hysterically high $10.25 billion, a price that will take most of HP's bank balance.

So it appears that Lane, Robison, CFO Cathie Lesjak, whose sales projections Léo repeatedly had to recant, and Ann Livermore, now on the board but as HP's enterprise chief didn't exploit HP $13.9 billion EDS acquisition, are likely to be ousted at some point soon too.

If they don't go quietly, activist shareholders who have lost half their money since HP tossed out Mark Hurd, may make a bid to dump the whole board and substitute their own slate.

Probably the most shocking revelation about the HP board was memorialized in a New York Times article Wednesday after the paper interviewed several past and current HP directors and people close to them involved in the CEO search. The paper was told that the board never interviewed Léo or the two other finalists before Léo was hired. Most of them had never even met him.

The board had some vague appreciation that his short tenure at SAP was a bust but was too consumed with its own "animosities, suspicion, distrust, personal ambitions and jockeying for power" to have the energy left to talk to Apotheker before he was enthroned. Apparently they were exhausted from fighting over Mark Hurd's ouster. "There were so many hard feelings," one director told the Times, "It became difficult to conduct business in a civil manner."

In fact, some directors reportedly declined to sit on the four-man search committee with Joel Hyatt because he had supported Hurd. Marc Andreessen, who was on the search committee, reportedly wanted Scott McNealy. Léo was picked as the "best of a very unattractive group."

The timing couldn't have been worse. He took office in the middle of SAP's trial for stealing Oracle's IP. Oracle claimed to want to serve him with a subpoena and haul him into court. He stayed out of California beyond the reach of the process server and Oracle repeatedly played the "Where's Léo" card.

It was not a good beginning and subsequent events proved Oracle CEO Larry Ellison prophetic in saying, "The HP board needs to resign en masse...right away. The madness must stop."

Léo meanwhile will get somewhere between $33 million and $35 million in severance to compensate him for the 11 months he spent at HP. Obviously boards everywhere have to start paying for performance, not failure.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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