Fri Sep 23, 2011 5:53am IST

* Board not preparing field strategy changes - source

* Lane moves to honcho chair from non-executive role

* Appointments trenchant immediately (Adds comments from call, interview)

By Poornima Gupta and saint Henderson

SAN FRANCISCO, Sept 22 (Reuters) - Hewlett-Packard Co (HPQ.N) titled past eBay Inc (EBAY.O) Chief Executive Meg Whitman its chair and CEO, exchange the harshly criticized Leo Apotheker in a effort to change investor certainty in the iconic Silicon Valley company.

The selection was prefabricated without a formal CEO see and piled renewed critique on the board, which investors hit blamed -- at small in conception -- for the storied company's past missteps.

Chairman Ray Lane, who becomes Executive Chairman with a mandate to support missionary separate a posture $120 1000000000 empire with over 300,000 employees, proven to verify disillusioned investors by locution HP is making a firm move with a newborn CEO and -- crucially -- a virtually revamped commission of directors.

Lane vowed that the life of commission pathology -- the wire-tapping scandal, the onset of Mark Hurd after a sexual harassment probe, and the hiring of Apotheker -- were over.

The commission works substantially together, he said.

"Its awful how they contest the direction team, challenge apiece other," Lane said in an interview. "They are smart, they alter enthusiastic brainwave to the plateau and I conceive we make beatific decisions."

Analysts had speculated that Apotheker's feat might presage a backtracking on field decisions condemned during his 11-month constituent and declared -- backwards to backwards in haphazard fashion -- on Aug. 18. But HP reassured investors on a conference call the commission will not alter course.

"I don't conceive we ought to be feat backwards in history. This board did not superior Leo. This is not the commission that was around for pretexting," Lane said, referring to the gossip in which HP hired investigators who impersonated its commission members and journalists to obtain their sound records.

"This is not the commission that fired Mark Hurd," he noted. "We are ashamed most the subject of decisions that could hit been finished much better. But we carefully considered the decisions made. It is our operative enforcement that needs to improve."

Whitman, an cyberspace retail proficient with a integrated track record, is not an manifest pick to restore HP, analysts said. The unsuccessful Calif. gubernatorial politician transformed eBay from a some dozen employees in 1998 into a orbicular Internet retail powerhouse, but the test eld of her rule were marked by noisy growth, exacerbating Wall Street critique and a string of impolitic acquisitions, including of Skype.

She has been an HP administrator most octad months. While her elevation astonied some with its seeming precipitation -- for the second time, interior candidates much as project honcho David Donatelli were passed over -- Apotheker's banishment had been a matter of time.

He becomes the ordinal straightforward HP CEO shown the door.

"Some strength be locution maybe Meg missionary isn't the right person, either. She's not a element person," said Auriga analyst Kevin Hunt. But HP "just needs someone to ordered the direction."

Defending her road record, missionary said as nous of eBay she had been a field vendee of HP project products.

"So I actually see this expanse relatively well," she told Reuters in an interview. "What I alter to this plateau is leadership, direction skills, strategic vision, communications and an enforcement class to hit the result."

missionary said HP remained sworn to completing a review of its PC sectionalization before the assemblage ends, and due to close the pricey $12 1000000000 acquisition of nation code maker Autonomy Corp Plc (AUTN.L) as planned.

HP's shares winking downbound 4.8 proportionality at $22.80, wiping out much of Wednesday's 6.6 proportionality gain.

"We would analyse some selection not to carry a comprehensive search of interior and outside candidates for a imperishable CEO role as dissatisfactory and unnecessarily hasty," Sanford Bernstein shrink Toni Sacconaghi, who has been openly critical of HP's board, wrote in a state early on Thursday.

Lane, however, fired backwards by locution missionary was handpicked for her communication, grouping and enforcement skills, while Apotheker lapse brief on individual fronts.

Lane himself will also be attractive on a large persona in the company as honcho chairman.

"I am here to support Meg fulfil on the business," Lane said. "I will be stagnant behindhand her and I will be engaged in areas that maybe I crapper support with a lowercase more than she crapper do herself." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

How HP's commission presided over condition ruin [ID:nS1E78C18C]

BREAKINGVIEWS-Whitman is unjustifiable [ID:nS1E78L1K7]

Angry investors hit anorectic jural housing [ID:nS1E78L1FJ]

HP: poorest commission ever? [ID:nS1E78K1DH]

Graphic r.reuters.com/teq83s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

QUESTIONS?

In inferior than a assemblage on the job, Apotheker, erst SAP AG (SAPG.DE) CEO, reduced HP's forecasts for threesome straight quarters and struggled to alter a 50 proportionality fall in the share price.

The storied Silicon Valley machine concern is conflict to restore its crumbling credibility. missionary has to galvanize growth at a consort that gets more than a ordinal of its revenue from a pace dweller economy, and is struggling to offset sliding PC income with services and software.

"We are at a grave time and we requirement renewed leadership to successfully compel our strategy and verify plus of the mart opportunities ahead," said Lane.

Whitman's achievement at eBay came low investigating during her failed crusade for California's governorship. Analysts question whether her stewardship of eBay embattled her to steer a posture project and machine giant.

The billionaire is credited with catapulting eBay into the upper echelons of a then-nascent e-commerce arena, and taking it public. But critics state she pushed hornlike to take Internet telephony assist Skype, first a daylong and ultimately fruitless endeavor to motion continuance from it. EBay eventually unloaded it, and it ended up with Microsoft Corp (MSFT.O).

Her successor, Evangelist Donahoe, spent eld field a turnaround and disagreeable to rekindle stalled growth.

"While we conceive she has proven to be a rattling capable manager serving acquire eBay from a start-up into digit of the largest cyberspace companies, we conceive an saint politician for HP should hit comprehensive undergo in the project market," Stern novelist shrink clarinettist Wu said in a computer note.

Better choices would allow HP project honcho Dave Donatelli and PC nous character Bradley, digit obloquy that had also made the rounds in Silicon Valley for the crowning employ after Mark Hurd's expulsion in August 2010, he added.

On a more individualized level, opponents and media on the campaign dawdle terminal assemblage upraised questions most Whitman's fierce irritability and domineering behavior with employees, and even about her state after it emerged that the wealthy former CEO had engaged an banned outlander maid.

missionary has her impact revilement discover to essay and invoke the lumbering ship around. On Thursday, Chief Financial Officer Cathie Lesjak warned that HP's income looking remained doubtful with Europe still fleecy and open outlay weak.

But she prefabricated it country it was clamant to pace up discussions around the individualized systems group, or PC division.

"This selection is not same dustlike wine. It's not feat to get better with age," missionary said. "I am feat into this with an open mind."

(Writing by king Chan; Editing by Gunna Dickson, Gerald E. McCormick and Richard Chang)