October 1, 2010 / 12:47 AM / 9 years ago

New HP CEO seen sharp but holds mixed record

NEW YORK (Reuters) - An outsider was what some Hewlett-Packard Co investors had hoped for. But Leo Apotheker, appointed HP’s new chief executive, may not be who they had in mind.

The 57-year old former head of SAP, a bon vivant fluent in five languages, was a surprise choice for the role, which many thought would go to a Silicon Valley veteran, if not an insider.

Those acquainted with Apotheker say he has a sharp business acumen. But his leadership record is mixed, and is stained by an abrupt exit in February from the German software company amid investor criticism.

Among his accomplishments at SAP, Apotheker executed the company’s first major acquisition, a $7.5 billion buyout of business intelligence maker Business Objects, which was completed in 2008.

But he is also known for missteps and gained a reputation along the way of being aloof and having lost touch with employees, clients and shareholders.

Under his watch, the software maker attempted an across-the-board hike in prices, only to back down after a large number of customers complained.

At the time, critics complained that he failed to explain how SAP could take on rivals International Business Machines Corp and Oracle Corp, and ultimately failed to reverse SAP’s sales decline.

In January 2009, he oversaw SAP’s first ever major round of job cuts, eliminating some 3,000 staff.

When he quit after a mutual agreement with SAP’s board, Danish Jyske Bank said: “Leo Apotheker has had from time to time a tendency to appear arrogant ... which has made it more difficult to get his message across.”

That attitude could backfire at HP, where shareholders and employees have been traumatized by two acrimonious departures in five years. Former CEO Mark Hurd quit in August amid a scandal involving a female contractor. Hurd’s predecessor, Carly Fiorina, was ousted in 2005 by a board of directors unhappy with HP’s erratic financial results.

One defender called such harsh talk unfair, considering the timing of Apotheker’s tenure. Apotheker was named co-CEO of SAP with Henning Kagermann in April 2008, and held the job alone when Kagermann retired in 2009.

“Leo is a very bright guy. He has a bad rap because he got handed the wheel of the Titanic five minutes after it hit the iceberg,” said Peter Goldmacher at Cowen and Co.

His ascension to the top of SAP was also somewhat unexpected, being the first leader at the company unable to write software code.

Apotheker, who studied international relations and economics at the Hebrew University in Jerusalem, identified more as a cosmopolitan business man than an engineer.

He has a reputation for enjoying theater as well as fine food and wines. Born in Aachen, Germany to Holocaust survivors, he is fluent in Dutch, English, French, German, and Hebrew.

At work, Apotheker was known as a “taskmaster,” said one former colleague, who declined to be named.

“A lot of people felt that he was arrogant because he didn’t suffer fools gladly,” the former colleague said. “He had high standards. This made some people nervous if they were used to the status quo but he always gave people a second chance.”

On Thursday, nervous HP investors sent shares down nearly 3 percent in extended trade to $40.89 after closing at $42.07.

Additional reporting by Sinead Carew in New York and Alexei Oreskovic in San Francisco; Editing by Bernard Orr

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