The legendary garage startup that became a technology giant has fallen on hard times in the past decade. Carly Fiorina, who took over in 1999, oversaw the company's expansion in the PC market with some acquisitions that didn't provide the expected boost to business. In 2005, the board replaced her with Mark Hurd, who won high marks for refocusing the company but resigned in 2010 after a sexual-harassment investigation uncovered irregularities with his expense account. Former SAP CEO Léo Apotheker took over last year and tried to move the company away from personal computer hardware and toward software services, a transformation that IBM executed successfully. But after lowering the company's financial outlook three times in his 10-month tenure, he ran out of time. On Sept. 22, the board replaced him with Ms. Whitman, the successful eBay CEO who left in 2007 and ran for governor of California in 2010.
"You tend to see turnover when performance is poor, which it has been – certainly lately," says Steven Kaplan, a finance professor who has studied corporate governance at the University of Chicago Booth School of Business. "It also suggests a board that is not doing a good job."
The company's stock has lost two-thirds of its value since hitting its dot-com peak in 2000, in sharp contrast to Apple, whose share price has soared.
But rapid CEO change isn't unique to HP. There's...
