The move may give Meg Whitman, H.P.’s chief executive, a little more breathing room in her long and painful effort to turn the technology giant around. H.P. is one of the biggest technology companies in terms of sales, but for years it has been marked with financial losses, bungled acquisitions, and turbulence in the executive ranks and boardroom.
Ms. Whitman, who took over in September 2011, has said H.P. will return to modest profitability in 2014 and have robust growth in the years after.
“The pressure is on Meg,” said Toni Sacconaghi, an analyst with Bernstein Research. But, he said, a housecleaning of the board “bought her a year.”
Mr. Lane, who will continue to serve on the board, will be temporarily succeeded by Ralph Whitworth, an activist shareholder who joined the H.P. board in November 2011. He has been a champion of Ms. Whitman.
No successors for the departing board members — John H. Hammergren and G. Kennedy Thompson — were immediately named. The two, who barely survived re-election to the board at a meeting in late March, are expected to serve until May.
During the shareholders meeting, Mr. Whitworth took the unusual step of indicating, while voting for directors was under way, that some board members would soon step down.
“All boards should evolve, certainly when they’ve had the recent past this one does,” he said. “You can expect some evolution of the board over the coming years — months, maybe.”
It is not clear whether this comment swayed some votes toward Mr. Hammergren and Mr. Thompson, two of the longest-serving board members. Mr. Hammergren received 54 percent of the vote and Mr. Thompson 55 percent. Mr. Lane was re-elected with 59 percent of all votes cast. Other board members had majorities of over 90 percent.
“Having under 60 percent is not a vote of confidence,” Mr. Sacconaghi said. “They worked hard to secure support, and in the end they barely got a majority for these three people. It reflected the sins of the past.”
Mr. Lane said the vote was a major reason he was stepping down.
“After reflecting on the stockholder vote last month, I’ve decided to step down as executive chairman to reduce any distraction from H.P.’s ongoing turnaround,” he said in a statement issued on Thursday by H.P.
In the same statement, Mr. Whitworth said Ms. Whitman “is leading a herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and H.P.’s entire team to succeed.”
Mr. Lane and the other two board members were publicly criticized for their oversight of H.P., including a spectacularly expensive acquisition that later failed, both before and after the shareholder vote. On Thursday, their critics were quick to praise their resignations.
“Directors must be willing to ask tough questions, challenge assumptions and have the capacity to walk away from a deal that is unlikely to add value for shareholders,” said ISS, a proxy advisory firm that opposed Mr. Lane. “That clearly didn’t happen at H.P., and shareholders hold Mr. Lane accountable for that failure.”
The New York City comptroller, John C. Liu, another critic of the company, said in a statement, “H.P.’s board got the message.” He added, “This a good day for H.P., its board and its share owners.” The New York City pension fund has over $100 million in H.P. stock.
Mr. Hammergren, who as chief executive of the McKesson Corporation is one of the highest-paid chief executives in the United States, has served on H.P.’s board since 2005. He was on the board while it was at the center of a scandal involving spying on journalists, board members and employees, and during the 2010 resignation of Mark Hurd as chief executive after he admitted to improper relations with a contract employee.
Mr. Hurd’s successor, Léo Apotheker, lasted less than a year. He was hired without meeting or speaking with most members of the board. As chief, he agreed to pay $11.1 billion for Autonomy, a British software company and mused publicly about whether to sell H.P.’s personal computer business. He was succeeded by Ms. Whitman a month after those actions.
Late last year, H.P. took a more than $8 billion accounting charge in conjunction with the Autonomy purchase. It contended that it had been misled about the health of the company.
Mr. Thompson, a principal of Aquiline Capital Partners and a former chairman of Wachovia, joined the H.P. board in 2006, after the spying scandal. Mr. Lane, a former president of Oracle and a venture capitalist at Kleiner Perkins, joined the H.P. board in 2010. He was a vocal supporter of Mr. Apotheker.
Article source: http://www.nytimes.com/2013/04/05/technology/hewlett-packard-chairman-steps-down.html?partner=rss&emc=rss
