HP Chief Says Deal Is Misinterpreted

Hewlett-Packard Co. Chief Executive Carly Fiorina blamed “shallow reporting” by reporters and Wall Street analysts too “focused on the short term” for the difficulties facing a planned merger with rival Compaq Computer Corp.

Fiorina also said employees will be granted a one-time bonus equal to two days of salary, an unexpected boon after months of cost cutting. Senior executives will not be eligible for the one-time bonus.

The bonus announcement and the stinging rebuke to critics came in a letter to HP’s employees made public in a filing Thursday with the Securities and Exchange Commission.

Hewlett and Compaq also told the SEC that Fiorina and Compaq CEO Michael Capellas turned down multimillion-dollar retention bonuses offered in connection with the merger.

Hewlett announced its $24-billion all-stock offer for Compaq on Sept. 3.

The planned purchase has faced opposition from members of founding Hewlett and Packard families, who control less than 10% of its stock.

Capellas was set to receive a $14.-4 million bonus, while Fiorina’s bonus was $8 million.

Fiorina, who joined HP in July 1999, said in her letter to employees that the media has mistakenly focused on the soap opera-like elements of the apparent clash between the “the newcomers--meaning me--and the HP family.”

Fiorina has blamed critics for focusing on the combined companies’ huge personal computer operations instead of the services and high-end computer units, which she said were the strategic keys to the deal.

HP shares rose 1 cent to close at $22.09 on the New York Stock Exchange.