HP chairman Lane yields to 'here's you hat, what's your hurry?' pressure
Two other beleaguered directors also exit, stage left
Succumbing to pressure to shake up the board of directors of HP, chairman Ray Lane is stepping down from running the board. However, he said in a statement, he will remain on the HP board – even if he doesn't run it.
Lane, a former hotshot at software giant Oracle and a managing partner at venture capitalist Kleiner Perkins Caufield & Buyers, became non-executive chairman of the HP board back in November 2010, and became executive chairman in September 2011.
What had HP shareholders miffed last month as some tried to oust the current board was the fact that the Lane was in command when HP ponied up $10.7bn to acquire Autonomy in August 2011. Lane was chairman and Whitman was a board member that he brought in.
No one seems to be calling for Whitman to step down, however, even though she approved of the Autonomy deal. In a financial statement, HP subsequently said the deal was a a very bad idea, and tried to pin the blame on the top brass at Autonomy, alleging malfeasance, and on former HP CEO Leo Apotheker. Last November, HP wrote down $8.8bn of the Autonomy acquisition, saying that Autonomy "misrepresented" around $5bn of its value during the acquisition.
"After reflecting on the stockholder vote last month," Lane said in the statement, "I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnaround."
While all of the board members received more than 50 per cent of the vote to stay in office, Lane was apparently not pleased with his 59 per cent showing.
"Since I joined HP's board a little over two years ago," he said, "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."
Now, as temporary chairman of the board, activist investor Ralph Whitworth, who runs Relational Investors and has put $800m of the firm's money into HP stock, gets to sit in the hot seat that Lane is vacating.
In his own statement, Whitworth said that HP would be looking for a new chairman and replacement board members, and that in the coming months there would be "further evolution of our board of directors."
Whitworth did not elaborate on what that might mean, but he did say in an interview with The Wall Street Journal that Lane did not believe he had "a mandate from the shareholders" and therefore decided to step down.
Whitworth joined the HP board in late 2011, and had been one of those pesky activist investors through Relational Investors since it was founded in 1996.
Whitworth gave a glowing review of CEO Whitman in his statement, and said that the HP board was behind the current HP team, and were "100 percent committed to supporting Meg and their efforts to turn around HP and restore it to its rightful place at the pinnacle of global business."
Two other board members who were also around when the Autonomy deal was approved – G Kennedy Thompson, formerly CEO and chairman of the former financial services giant Wachovia (which disappeared into the gaping maw of Wells Fargo during the financial crisis), and John Hammergren, chairman of healthcare company McKesson – will serve out their terms through May, and then step down. They got 55 per cent and 54 per cent of the vote to be re-elected on March 20 – obviously not votes of confidence. ®