SAN FRANCISCO, March 11 Hewlett-Packard Co's
lead independent director defended Chairman Ray Lane and
two fellow board members on Monday against moves to oust them
over the mismanaged acquisition of Autonomy Plc, which British
authorities are investigating.
In a detailed letter to shareholders on Monday ahead of the
company's annual general meeting, Rajiv Gupta said the board had
laid a solid foundation for HP's turnaround and warned that
ejecting long-time directors would destabilize the company.
In a separate filing on Monday, HP said that Britain's
Serious Fraud Office had joined the U.S. Department of Justice
in opening an investigation into Autonomy.
HP, which bought the British firm for $11.1 billion, took a
massive writedown on its value last year and accused former
Autonomy executives, including then-Chief Executive Mike Lynch,
of accounting fraud.
Lynch has denied the allegations.
Gupta did not address the Autonomy angle in his letter, but
outlined the credentials of all three men that leading proxy
adviser ISS recommended be removed for their role in the deal.
In particular, he highlighted Lane's global and management
experience as former chief operating officer of software giant
"Losing some of our directors in an abrupt and disorderly
manner could undermine our efforts to stabilize the company,"
Gupta, a former CEO of specialty materials maker Rohm & Haas
, wrote on Monday.
"What the company needs now is stability and consistency of
leadership so that the board and the management team can devote
all of their focus and energy towards executing on our strategic
HP CEO Meg Whitman is trying to revive a company once
synonymous with Silicon Valley but which fell on hard times in a
contracting personal computing market, by re-focusing the
sprawling corporation on enterprise computing services.
Lane was instrumental in Whitman's appointment.
But last week, ISS, closely followed by investors seeking
guidance on controversial issues, suggested voting against Lane,
a managing partner at high-powered Silicon Valley venture
capital firm Kleiner Perkins. They also gave board members John
Hammergren and G. Kennedy Thompson the thumbs-down.
Thompson was formerly chairman and CEO of Wachovia Corp, the
North Carolina bank bought by Wells Fargo & Co in 2008.
Hammergren is chairman and CEO of U.S. drug wholesaler McKesson
The same day, proxy firm Glass Lewis recommended
shareholders vote to remove four directors -- venture capitalist
Marc Andreessen and Gupta, along with Hammergren and Thompson.
Both firms blamed the directors for inadequate due diligence
relating to the acquisition of Autonomy. But Gupta on Monday
repeated HP's official recommendation that shareholders vote to
re-elect all current directors.
The recommendation against Lane marked one of the few
"special cases" in which ISS has advised shareholders against
re-electing the chairman of the board.
In 2012, it recommended against Wal-Mart Stores Inc
Chairman Robson Walton and other directors for failing to fully
investigate allegations of widespread bribery by company
officials in Mexico.
And in 2009, ISS advised shareholders to vote against
re-electing Bank of America Chairman Ken Lewis,
following its costly acquisition of Merrill Lynch.