HP board shake-up over multibillion-dollar deals that went sour
HP has incurred the wrath of many investors for its sluggish sales and slumping profit and stock price over the past couple of years, although the stock has begun turning upward this year.
San Jose Mercury News
Under heavy fire from investors over several recent multibillion-dollar bungles and other corporate missteps, Hewlett-Packard announced Thursday that Chairman Ray Lane will give up his post, and two other board members will resign.
Lane, who some critics had unsuccessfully sought to be ousted at the company’s annual stockholders meeting last month, will remain as a director and be replaced on an interim basis as chairman by director Ralph Whitworth.
Two other much-criticized directors — John Hammergren and G. Kennedy Thompson — will resign from the board, the company said. Both of them had narrowly survived a vote to remove them from the board during the March meeting.
“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 the Palo Alto, Calif., company’s 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. 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.”
CEO Meg Whitman praised Lane, Hammergren and Thompson in the statement.
“Their leadership is reflected in the early success we’ve had turning the company around,” she said. “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.”
HP has incurred the wrath of many investors for its sluggish sales and slumping profit and stock price over the past couple of years, although the stock has begun turning upward this year. In addition, many investors have been deeply concerned by HP’s recent multibillion-dollar corporate purchases that have turned sour, especially its $11 billion acquisition of British software company Autonomy in 2011.
HP recently wrote off about $8.8 billion worth of Autonomy’s value, saying it was misled about that company’s value.
Hammergren has been an HP director since 2005 and is chairman of health-care company McKesson, Thompson has been a director since 2006 and is a principal with private-equity firm Aquiline Capital Partners, and Lane has been HP’s executive chairman since 2011 and is managing partner of private-equity firm Kleiner Perkins Caufield & Byers.
HP reshuffled its board with five new members two years ago to heal divisions and bring on new blood after CEO Mark Hurd resigned over an unproven allegation about his relationship with a consultant. Hurd was replaced by Leo Apotheker, who orchestrated the deal to buy Autonomy. He was replaced nine months later by Whitman, who is in the middle of a yearslong turnaround plan.
HP said it was conducting a search to find a permanent chairman.