HPE's Meg Whitman Is Stepping Down on Her Own Terms

[Leroy N. Soetoro]

Neri, Jewish Italian.

https://www.thestreet.com/story/14399979/1/hpe-s-meg-whitman-is-stepping-
down-on-her-own-terms.html

Meg Whitman is stepping down on her own terms after six years at the helm
of a prominent American technology company and 35 years in the business
world.

The Hewlett Packard Enterprise Co. (HPE - Get Report) Chief Executive
Officer announced on Tuesday that she will step down effective Feb. 1,
2018, and HPE President Antonio Neri will succeed her. Whitman, 61, will
remain a director on HPE's board.

"It has been the privilege of a lifetime to lead the company founded by
Bill Hewlett and Dave Packard," Whitman said during a conference call with
analysts. "We've laid out a strong foundation for a prosperous future, and
now is the right time for Antonio and a new generation of leaders to take
the reins."

Whitman's departure surprised some analysts but they were largely positive
on Neri's appointment.

"We believe Mr. Neri's experience running the Enterprise Group makes him a
strong fit for the current HPE," wrote BMO Capital Markets analyst Tim
Long in a research note on Wednesday. "That said, we are surprised by the
timing of the CEO transition given commentary at the recent analyst day
that seemed to imply a CEO transition was not in the offing."

"We see this as a positive step forward as the uncertainty related to her
tenure and the future of the company had likely impacted retention and
recruitment," wrote KeyBanc Capital Markets analyst Alex Kurtz. (Whitman
had been a top contender to take over at Uber, but ultimately did not take
the position.)

HPE underwent a series of corporate restructurings during Whitman's
tenure. She served as CEO of HP Inc. (HPQ - Get Report) since 2011 and
remained CEO of HPE following its split from HP Inc. in 2015.

"We have a much smaller, much nimbler, much more focused company," said
Whitman. "And I think it is absolutely the right time for Antonio."

"The next CEO of this company needs to be a deeper technologist, and
that's exactly what Antonio is," Whitman said.

Her six years at the helm of HP or HPE fall just short of the average
eight-year-tenure for CEOs, according to February 2017 report by executive
search firm Korn Ferry. At 61, Whitman exceeds the average age of 58 for a
CEO across all industries, according to a Korn Ferry study of the top
1,000 companies by revenue in 2016.

Following her assistance during the transition, Whitman said she is taking
some time off. She said she is not running for office and has no intention
to take another CEO position. She lost a race to be governor of California
in 2010 to Jerry Brown.

"If it was another CEO job, it would have to be exactly the right
opportunity," said on CNBC's "Squawk on the Street" on Wednesday. Whitman
also said that there is "no chance" she will join a competitor to HPE.

Still, her departure means that just 27 companies of the S&P 500 will have
a woman as a CEO, according to BoardEx, a relationship mapping service of
TheStreet Inc.

"I think in the last couple of decades that we have made a lot of progress
in the number of female executives in the C-Suite," Whitman said. "It has
stalled out in the last decade if you look at the data and that is
concerning."

"We need to continue to encourage the pipeline of women going to business
school, law school, getting into business and beginning to build their
careers," Whitman said. "We need to make sure that the next generation of
women is strong and has all of the opportunities that they deserve," she
added.

But women CEOs are often held to a higher standard than their male
counterparts, despite the fact that Fortune 500 female CEOs tend to have
more experience and more rigorous academic degrees.

Whitman is a graduate of Princeton and Harvard Business School, according
to BoardEx. After Harvard, she was a brand manager at Procter & Gamble Co.
(PG - Get Report) , before becoming a consultant at Bain & Co. She worked
at Walt Disney Co. (DIS - Get Report) and Hasbro Inc. (HAS - Get Report)
before becoming eBay Inc.'s Ebay CEO in 1998. After her unsuccessful
gubernatorial run in 2010, Whitman landed the top job at Hewlett Packard,
the predecessor to HPE, in 2011.

A 2015 study by non-profit educational membership organization American
Management Association (AMA) found that the average graduate school
ranking is 18.1 for a woman, compared to 20.7 for male Fortune 500 CEOs.

Women also tend to have more work and life experience when initially
appointed to lead a company. Female CEOs are appointed at an average age
of 52.8 years old versus 50.2 years old for males.

"These statistics seem to show that women are held to different if not
more demanding standards than men," said Jeremey Donovan, chief marketing
officer for AMA and the author of the report.

Donovan suggested that there are systemic reasons why women find it more
difficult to reach the top-tier of the corporate pipeline.

"There's discrimination, conscious or unconscious," Donovan said.
"Corporate culture is still male dominated, a phenomenon women are surely
aware of even if men may not be."

Men may be finally starting to understand the level of discrimination
toward women in the workplace given the recent reckoning of sexual
harassment allegations against some of the male titans in politics and the
media.

"You think about incidents over the last year, with Harvey Weinstein,
Roger Ailes and Bill O'Reilly," Rent the Runway CEO Jennifer Hyman told
CBS News. "These are companies where not just those individuals were
extremely powerful, but everyone who runs that company and anyone in a
position of power is a man."

"If you had women on the boards in those companies, you would not have had
the kind of payouts -- there's no way," added Jane Rosenthal, film
producer and Tribeca Film Festival co-founder. (Twenty-First Century Fox
Inc. (FOXA - Get Report) has paid out $50 million over the past year to
settle sexual harassment claims.)

Donovan suggests that companies review hiring practices, help women find a
mentor, educate leaders about gender pay gaps and support female career
development.

Recent studies have also suggested that having more women in leadership
roles may improve a firm's performance. Companies in the top quartile for
gender diversity were 15% more likely to have financial returns that were
above their national industry mean, according to a 2015 study by
management consulting firm McKinsey and Co.

HPE shares fell by more than 8% as of about 12 p.m. on Wednesday.

Meg did the needful.

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