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 user 2003-09-19 at 9:28:00 am Views: 160
  • #7197
    Carly’s Departure Hints at Cisco/H-P Tension
    Hewlett-Packard CEO Carly Fiorina will leave the Cisco board this fall. According to Cisco’s Proxy Statement, filed Thursday with the Securities and Exchange Commission, Fiorina won’t seek re-election to the board. Fiorina, who became a Cisco director in 2001, has been a member of the nomination-and-governance committee. She will serve through Cisco’s annual meeting on Nov. 11.

    The move comes as big companies from Microsoft to General Electric tweak their arrangements with execs and directors, and as Wall Street reels from a pay scandal that claimed the head of a well-respected New York Stock Exchange chief. But some observers think Fiorina’s move has less to do with corporate governance than with tech-industry jockeying for position.

    Fiorina’s departure “may suggest that there may be more competition ahead between H-P and Cisco,” says CIBC World Markets analyst Steve Kamman.

    Indeed, there’s some sense that the move could have been dictated by the potential for conflict between the tech juggernauts as Cisco expands beyond its usual role of making gear for companies’ communications networks and into new markets.

    Cisco reps said it was Fiorina’s decision to step down, and H-P reps weren’t immediately available for comment.

    But the tech industry has been rife with reshuffling talk ever since the go-go days of the late 1990s came to a close. And that could mean new alliances and new tensions.

    For instance, as The Wall Street Journal reported Thursday, there have been discussions between Cisco and H-P rival IBM over incorporating some of Cisco’s Internet-switching technology into IBM Internet severs.

    These so-called blade servers put more Internet traffic control features into one box, reducing costs and eliminating the space concerns associated with having those features on separate hardware devices.

    The big server-makers are looking for ways to partner or go it alone, say analysts.

    The Cisco filing also revealed that CEO John Chambers took only $1 in salary this year, continuing a pledge he made when the company failed to deliver the robust growth investors had come to expect.

    Of course, Chambers isn’t exactly suffering. In lieu of a big salary, he was granted 4 million shares of Cisco stock worth $86 million, going by today’s market value. Chambers now has 30 million shares, or $643 million worth of Cisco stock.