HP chairman Ray Lane steps down following shareholder attack

Ray Lane has stepped down as chairman of the board of HP following a meeting with angry shareholders in March

Ray Lane has stepped down as chairman of the board of HP following a meeting with angry shareholders in March.

In the shareholder meeting, the strongest protest vote was against the two longest-serving directors, John Hammergren and Kennedy Thompson, with 46% and 45% of votes cast against their re-election respectively.

Lane attracted a 41% vote against his return, while 30% voted against Marc Andreessen and 20% against lead independent director Ralph Gupta.

“Each one of our directors considered the results of our recent shareholder meeting and made the personal decision to do what they felt was best for HP,” said Ralph Whitworth, the new interim chairman of HP's board of directors.

The company’s board of directors was attacked by shareholders at last month's meeting for the company’s poor acquisition strategy. Board members were also slammed for not owning shares in HP, given the company’s recent losses.

For the quarter to 31 January 2013, HP reported a year-on-year drop in notebook sales of 16%. Net revenue in its enterprise group dropped 5% year on year, while enterprise services business revenues dropped 7% from 2012. 

Overall, HP lost $1.68bn compared with the same quarter in 2012.

Shareholders were angry at the $10bn (£7.7bn) Autonomy acquisition and the $13.9bn acquisition of EDS. As Computer Weekly has previously reported, the EDS business has diminished in value by $8bn since the acquisition. At the same time, the company is in a legal battle with Autonomy founder Mike Lynch over the inflated valuation of the software company.

At the meeting, CEO Meg Whitman was also targeted by one shareholder, who pointed out she was on the board of several companies, including Proctor & Gamble. 

A transcript of the shareholder meeting posted on the Seeking Alpha financial website notes, “This is probably not the kind of board that you want for a company that's about to face a crisis,” quoting Jay Lorsch, a management professor at Harvard Business School.

The transcript showed that another shareholder questioned HP’s open approach to datacentre systems, compared with Oracle's Sparc processor. The shareholder noted that the Oracle Sparc chipset, server hardware and enterprise software was analogous to the integrated experiences offered by Apple, which has earned Oracle a 17% return on capital.

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