NEW YORK—Barely three weeks to voting day, the tension between the Hewlett-Packard Co. and the founding family has heightened as the executives of the company continue to pitch the merits of a merger with computer maker Compaq.
While Walter Hewlett, son of one of the founders who is in the opposition vanguard to the merger, says it will create a bloated and cumbersome company, Chief Executive Carly Fiorina says big is beautiful and that the move is a bold effort in tune with the market trend toward consolidation.
But the tension has not always been sober and restricted to business debates. Hewlett has accused Fiorina of pursuing the deal in order to secure hefty compensations for herself and other members of the company once the merger succeeds.
Hewlett also said the board was considering paying both Fiorina and Compaq chief executive Michael Capellas a combined compensation of $115 million, including salary, stock options and bonuses.
Fiorina has said she has not accepted the compensations and regarded Hewlett’s assertions as efforts to discredit her and the top executives of the company.
“Simply put, Walter Hewlett is again attempting to mislead investors—but worse than his usual flip-flop, it is plainly deceptive,” said the company in a statement. “It is unfortunate that he is willing to breach his fiduciary duties as an H.P. director.”
Hewlett said the executives do not want to reveal the compensation because they are waiting for the deal to succeed first and also they want to avoid criticism.
Chief Financial Officer Bob Wayman said the merger will cost $21 billion and HP will take $1.4 billion in charges.
It is not clear as yet whether the deal will go through as most shareholders are holding their positions close to their chests.
