HP's Ray Lane is stepping down as chairman, but will remain on the HP board, the company confirmed today.
Ralph Whitworth, a veteran shareholder activist, will run the board temporarily.
Ray Lane was one of three board members that barely held onto his seat during HP's annual shareholder meeting last month.
The two other directors that were almost voted off are also stepping down.
Lane got 58 percent of shareholder votes at that meeting. Influential proxy firm ISS had recommended voting against him. Likewise, McKesson CEO John Hammergren got 54 percent of shareholders' votes and former Wachovia CEO G. Kennedy Thompson got 55 percent.
It's highly unusual for so many shareholders to vote against sitting directors like that. Most are typically voted back in by 90%-plus of the shareholders.
But shareholders have been upset by the Autonomy acquisition. Lane was instrumental in hiring HP's previous CEO, Leo Apotheker, and was chairman when Apotheker crafted the Autonomy deal. HP bought Autonomy for $11 billion and, about a year later, wrote-off $8.8 billion and said it discovered $5 billion in fraud.
Here is the full press release:
HP Announces Changes to Board of Directors
• Raymond J. Lane steps down as chairman, remains a director
• Ralph V. Whitworth becomes interim chairman
• G. Kennedy Thompson and John H. Hammergren to leave board
PALO ALTO, Calif., April 4, 2013 — HP today announced changes to its board of directors. Raymond J. Lane has decided to step down as chairman of the board, to be replaced on an interim basis by Ralph V. Whitworth. The board is commencing a search for a permanent nonexecutive board chairman.
In addition, John H. Hammergren and G. Kennedy Thompson, after eight and seven years of service to HP stockholders, respectively, have decided to leave the board. Both
directors will continue to serve until the May board meeting. The board is commencing a
search for two or more new independent directors.
“After reflecting on the stockholder vote last month, I’ve decided to step down as executive chairman to reduce any distraction from HP’s ongoing turnaround,” said Lane. “Since I joined HP’s board a little over two years ago, I’ve been committed to board evolution to ensure our turnaround and future success. I’m proud of the board we’ve built and the progress we’ve made to date in restoring the company. I will continue to serve HP as a director and help finish the job.”
“Ray, John and Ken are terrific leaders, and they’re passionate about doing the right thing for HP,” said Whitworth. “From here we will continue to recruit outstanding directors, strengthen our governance and do the best we can—the best we know how—for stockholders. Meg is leading a Herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and HP’s entire team to succeed.”
“Ray, John and Ken have invested a part of themselves in HP,” said Meg Whitman, HP
president and chief executive officer. “Their leadership is reflected in the early success we’ve had turning the company around. I’m grateful that Ray will continue to serve, and I wish John and Ken the very best. I also appreciate Ralph’s willingness to increase his
responsibilities during this transition.”
With Lane stepping down as executive chairman, the role of lead independent director,
currently held by Rajiv L. Gupta, is no longer necessary and will be eliminated. Gupta will remain on the board and will replace Thompson as chairman of the Audit Committee.
Gary M. Reiner will replace Gupta as chairman of the Nominating and Governance
Committee.
With Hammergren’s departure, Whitworth will become chairman of the Finance and
Investment Committee.
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