Fiorina Urges Money Managers To Stay Course On HP-Compaq Merger

Hewlett-Packard Compaq Computer

Speaking to a crowd of fund managers and investors at the N.Y. Hilton Wednesday, Fiorina urged investors not to be "distracted" by the mudslinging of HP board member Walter Hewlett.

Hewlett has launched a highly public and contentious campaign in the media to stop the deal.

Tuesday, Hewlett claimed that, should the merger proceed, compensation for Fiorina and Compaq chairman and CEO Michael Capellas would be $115 million, a charge Fiorina refuted. Shareholders have every right to know all details of the compensation of senior managers, particularly regarding herself and Capellas, Fiorina said. However, she said, "we cannot disclose what has not been decided."

The new compensation committee of the combined company will make the decision on compensation based on the most recent market data to assure that top executives are "paid at the right rate," Fiorina said.

She insisted that that pay will be tied to "specific metrics to assure performance."

"The opposition wants to distract you," Fiorina said. Shareholders will vote on the proposed deal March 19.

Fiorina charged that Hewlett's vision is "not a plan. It is a press release."

Hewlett has said an independent HP should focus on the company's hugely profitable printer business and high-end services and steer clear of low-margin PCs.

But Fiorina has long maintained that HP has to be a full-service provider.

"I want you to focus on the substance of this management team, a real team with real plans and a real commitment to deliver real numbers that create real shareholder value," she said.

H. Leslie Fineberg, a principal with American Capital Investors of Sicklerville, N.J., said he has already decided to vote his 40,000-plus shares in favor of the deal. "They understand the differences in cultures," he said of Fiorina and her team. "They have been working on this for a year and a half."

If the deal does not proceed, he said, it is likely that Fiorina and several board members will leave HP.