Amid calls for the ouster of five board members of Hewlett-Packard, investors yesterday voted not to dump any of the company’s board of directors.
Investors it seem, took to heart the appeal by HP CEO Meg Whitman
during the company’s shareholders’ meeting where she admitted HP had to “execute better” and “get revenue growing again” but argued against voting its board members out as this could impact ongoing efforts to help the company rebound.
Meg Whitman, CEO of HP
HP, however said, the board has created a committee charged to look into how the company’s purchase of software company Autonomy Corp. and technology firm Electronic Data Systems.
HP also announced Wednesday that the board of directors has authorized a 10 per cent increase in the amount of its regular quarterly dividend, to $0.1452 per share. The increase is expected to occur in May. Apart from HP’s sluggish performance, investors are also questioning the company’s expensive acquisitions. HP spent $11 billion to acquire software company Autonomy in two years ago but recently said it was misled about the company’s value which HP now says was only $8.8 billion. Before that HP also came under fire for its 2008 purchase of EDS and the $1 billion acquisition of Palm.
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One investor interviewed by technology publication Silicon Valley.com said she was troubled by HP’s performance but voted to keep the board intact. “They have enough to worry about,” Jan Terry, 64, one of the 180 stockholders that attended the annual meeting in Mountain View, Calif. “I think they got the message that investors are displeased.”
The five directors that were targets for ejection were: John Hammergren, director since 2005 and chairman of McKesson Corp.; G. Kennedy Thompson, director since 2006 and principal of private equity firm Aquiline Capital Partners.; Rajiv Gupta, director since 2011 and chairman of Avantos Performance Materials; and Raymond Lane, HP’s executive chairman since 2011 and managing partner of private equity firm Kleiner Perkins Caulfied & Byers.
Among those calling for a board revamp were: CtW Investment Group, the California Public Employees’ Retirement System, New York City’s public pension funds and the American Federal State County and Municipal Employees Pension Plan.