* Time to bring fresh talent to the boardroom-Calpers
* Board needs to restore confidence of investors-CtW
* HP searching for 2-3 independent replacement directors
By Poornima Gupta
SAN FRANCISCO, April 4 Hewlett-Packard Co
Chairman Ray Lane, who has come under fire from
shareholders for his role in the acquisition of software company
Autonomy Plc, has relinquished his post in the No.1 personal
computer maker's latest board shake-up.
Two other directors left as HP, which has gone through
several board upheavals in the past decade, said director and
activist investor Ralph Whitworth will serve as interim chairman
until Lane's replacement is found.
HP is also seeking two to three new board members, the
company said on Thursday.
The changes come weeks after Lane, a Kleiner Perkins
managing partner who will remain an HP director, narrowly won
reelection at HP's annual shareholders' meeting with less than
60 percent of voting shares compared with 96 percent a year ago.
Two other directors who kept their seats with narrow
margins, G. Kennedy Thompson and John Hammergren, will leave the
board, and the company will look for two to three new,
Lane is one of the most prominent casualties of an
acquisition that has incensed investors, who have criticized the
company for paying $11 billion for Autonomy and for failing to
conduct proper due diligence. HP eventually took a multi-billion
dollar writedown on the asset's value.
"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," Lane said in
statement. "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."
The Autonomy deal capped a tumultuous decade for the company
that included the "pretexting" scandal of 2006, which led to the
resignation of then-chairwoman Patricia Dunn.
Four directors left HP in early 2011 following the ouster of
former CEO Mark Hurd in 2010. In late 2011 Whitworth joined the
board and director Whitman became CEO.
Whitworth, who runs activist hedge fund Relational Investors
LLC, had said at HP annual shareholders' meeting in March to
prepare for an "evolution" of the board.
Influential proxy firms ISS and Glass Lewis had recommended
that investors vote against a roster of directors at HP.
"The board needs to embrace long-term shareholders in the
selection of directors who can restore confidence in the audit
process, lend the necessary skepticism to quick-fix
acquisitions, and bring experience that can help HP nurture its
workplace culture of innovation," shareholder CtW Investment
Group said in a statement.
Calpers, the largest public pension fund in the U.S. with
about $256 billion in assets, said in a statement that it
welcomed the resignation of Lane and the departure of two
"It is time to move beyond the recent failures at HP and
bring fresh talent to the boardroom. HP needs a board which is
unencumbered and will provide rigorous oversight of all
decisions, including reviewing the auditor," said Anne Simpson,
Calpers senior portfolio manager and director of global
Hammergren and Thompson, who received 54 percent and 55
percent of shareholder votes respectively, will exit after a
board meeting scheduled for May, HP said.
Another director, Rajiv Gupta, will remain on the board but
will no longer be a lead independent director. He will replace
Thompson as chairman of audit committee.
The upheaval comes as HP and CEO Meg Whitman are undertaking
a multi-year turnaround to stimulate growth at the company,
which was once synonymous with Silicon Valley but has since
stagnated as its personal computer and printer business
She has asked investors to be patient while the company
undertakes layoffs and cost cuts and expands into areas with
longer-term potential, such as enterprise computing services.
HP shares fell to $22.10 in after-hours trade, from their
close of $22.30 on the New York Stock Exchange on Thursday.