Shareholders approve DEC acquisition by Compaq

WESTFORD, Mass. -- As expected, Digital Equipment Corp. shareholders Thursday morning approved the company's merger with Compaq Computer Corp.

'Not all of it was fun, and most of it was unpleasant, but it was necessary.' -- Digital CEO Robert Palmer

At a packed meeting, Digital (DEC) CEO Robert Palmer, who will leave the company in July, said goodbye to shareholders and employees and took a few barbs from the crowd.

While the merger received 72 percent approval from shareholders -- barely meeting the 66 percent requirement -- there were a few questions at the tally. In particular, shareholders and employees wondered why the company could not stand on its own, and why Palmer and other execs were being rewarded for "doing nothing."

Reviews of Robert Palmer's tenure as CEO of DEC were mixed at best.

"How is it appropriate that senior executives are walking out with millions, when in the last few years you have taken this company nowhere," one former employee asked.

Palmer defended the deal and his actions over the past few years, which have included slashing the company's headcount nearly in half.

Palmer defends actions
"Not all of it was fun, and most of it was unpleasant," he said. "But it was necessary."

Despite the employee reductions that have already taken place, Compaq (CPQ) execs have hinted that more drastic cuts are coming. Those reports did not sit well with many employees in the room, including a delegation representing about 20,000 European employees.

"The employees are sick and tired of layoffs and will fight for their jobs," said Derek Lee, a French employee representing European works councils and unions. Lee later said that while employees initially welcomed the idea of the merger, they are concerned that Compaq will "continue in the same mode of downsizing."

But for many employees, it was a day of mixed emotions. While they feared for their jobs, many said they thought the merger was the right thing to do.

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Employees should be nervous
"I believe that we couldn't stand on our own," said Steven Weston, who works in a Digital networking group in Littleton, Mass. "Because of the selling off of major pieces of the company -- storage, networking, printers, semiconductors -- what's left couldn't stand up."

Another employee, who asked not to be named, said that while she voted for the deal, "everyone in this room who is an employee should be nervous."