Hewlett-Packard (NYSE: HPQ) confirmed reports that Ray Lane, chairman of the struggling technology giant since 2010, is stepping down from that post, one of the few top brass still standing from former chief executive Leo Apotheker’s short-lived tenure and the latest fallout from the company’s $11 billion Autonomy disaster.
What does this change at the very top mean for HP? It’s really too soon to say, not knowing who will be Lane’s replacement, but what’s clear is the company’s investors aren’t thrilled and mean to run out of town those deemed responsible. Is this a meaningful win for investors? Let’s look closer at the details …
Lane ascended to executive chairman in a company shakeup in September 2011, when Apotheker was fired and current chief executive Meg Whitman took over the company’s helm. He was spared from losing his chairmanship only by a tepid 59 percent affirmation proxy vote last month at HP’s shareholder’s meeting, a vote taken amid charges by disgruntled investors who claimed he rubber-stamped the Autonomy deal.
Director Ralph Whitworth will replace Lane in the interim as the company looks for a permanent, non-executive chairman. Lane said he will stay on as an HP director.
“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,” said Lane in a statement.
HP directors John Hammergren and G. Kennedy Thompson, whose seats on HP’s board of directors also were targeted by disatisfied investors, will resign as well. Hammergren served on HP’s board for eight years and Thompson for seven. Both will leave after HP’s May board meeting. The company said it will begin looking for at least two new independent directors.
Whitworth, himself an activist investor, gained a seat on the board in November 2011 when he bought more than 17 million HP shares. In the interim, he will replace Hammergren as chairman of HP’s Finance and Investment Committee. Rajiv Gupta, head of the board’s nominating and governance committee, will replace Thompson at the top of the board’s audit committee, while Gary Reiner will take on Gupta’s duties.
Lane, a former Oracle (NASDAQ: ORCL) president and currently a managing partner at venture capital firm Kleiner Perkins Caufield & Byers, reportedly was uncomfortable with the thin margin with which he retained the company’s chair, viewing, perhaps correctly, the vote as one of no confidence. Indeed, all three board members must have felt the heat from investors as less than 54 percent of shareholders voted for Hammergren to retain his seat while Thompson received about 55 percent, according to reports.
“Meg is leading a Herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and HP’s entire team to succeed,” said Whitworth.
HP said that the role of lead independent director, currently held by Gupta, is no longer needed and will be eliminated.