Hewlett-Packard shareholders just reelected the entire board, but several directors, including chairman Ray Lane, barely squeaked through. He received only 59% of the vote, according to preliminary figures. Two other long-serving HP directors, John Hammergren and G. Kennedy Thompson, got 54% and 55%, respectively.
The close votes are a strong signal to the board to shape up.
Lane is HP’s longtime chairman who has seen the company through a series of ups and downs, though there have mainly been downs in recent years. He, along with former HP CEO Leo Apotheker, is blamed for the disastrous Autonomy acquisition in 2011 that is now the subject of inquiries by regulators in both the US and Britain. HP had to write down almost $9 billion for a deal that was already seen as too pricey by investors, which partly led to the ouster of Apotheker.
Hammergren and Thompson are also in the hot seat. The largest and most influential proxy advisory firm, Institutional Shareholder Services, which makes recommendations to investors on shareholder proposals, said HP investors should vote against the reelection of Hammergren and Thompson, along with Lane.
HP CEO Meg Whitman was also on HP’s board during the Autonomy acquisition and some questioned whether she was a wise pick to lead the company. But after a run of bad news, she is credited with helping to stabilize HP’s stock free fall, and the company recently reported better-than-expected earnings.
Still, HP’s shares have lost about half of their value in about three years. After some other shareholder groups challenged Lane’s position on the board, a compromise was reached to form a new board oversight committee to help guide Whitman through strategic decision-making. Activist investor Ralph Whitworth, who is known for pushing for sales, break-ups and other changes at companies, is head of that committee. He joined the board after the Autonomy buy.
Although the picture is improving for HP, today’s shareholder vote shows the company is still under pressure to get its act together. And Lane and other longtime board members can no longer be seen as a rubber stamp for the CEO.