Leading proxy firms seek ouster of HP chairman, directors

Tue Mar 5, 2013 4:26pm EST
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By Poornima Gupta

(Reuters) - Two leading proxy advisers on Tuesday urged Hewlett-Packard Co shareholders to oust several board directors for their role in the ill-fated 2011 acquisition of British software company Autonomy.

ISS, the No. 1 proxy adviser which is closely followed by investors seeking guidance on controversial issues, has suggested voting against Chairman Ray Lane and fellow board members John Hammergren and G. Kennedy Thompson.

And Glass Lewis has recommended shareholders vote to remove four directors - including venture capitalist Marc Andreessen, and Rajiv Gupta along with Hammergren and Thompson.

Both firms blamed the directors for inadequate due diligence relating to the acquisition of Autonomy. HP, which acquired the British firm for $11.1 billion, took a massive write-down on its value last year and accused former Autonomy executives, including then-Chief Executive Mike Lynch, of accounting fraud.

Lynch has denied the allegations. A HP spokesman said the "Board fully supports the election of each of the director nominees named in the proxy statement."

The recommendations, which could help sway undecided shareholders ahead of HP's annual meeting on March 20 in Mountain View, California, came days after a strongly worded declaration from union pension adviser and shareholder CtW Investment Group.

CtW also urged shareholders to reject board members Hammergren and Thompson, though CtW and Glass Lewis are not opposing Lane's re-election.

Despite the recommendation to vote against the directors, it is fairly rare for directors to not get elected, said David Eaton, vice president of research at Glass Lewis.   Continued...

A view of the Hewlett Packard headquarters in Palo Alto, California November 23, 2009. REUTERS/Robert Galbraith