Union pension adviser says will oppose two HP directors

Mon Feb 25, 2013 6:24pm EST
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By Ross Kerber and Poornima Gupta

(Reuters) - A union pension adviser said it will oppose two Hewlett-Packard Co directors and the company's auditor over governance issues, after HP leaders assuaged few of their concerns at a meeting on Monday.

The declaration by pension adviser CtW Investment Group sets up a potentially distracting battle in the weeks before the California computer maker's annual shareholder meeting on March 20.

Despite a good run lately HP stock has been held back by a string of troubled acquisitions. Michael Pryce-Jones, CtW senior governance policy analyst, said after Monday's meeting that the adviser will not campaign against board chairman Raymond Lane's nomination for re-election.

Pryce-Jones cited the risk of possible disruption to the giant California computer maker were Lane to lose re-election. But he said two other HP directors, G. Kennedy Thompson and John Hammergren, should be held responsible for HP missteps, like its purchase of UK software company Autonomy, tainted in the fall by accusations of accounting improprieties.

The two directors "have overseen so many missteps, so much destruction of value, that it's hard to believe this effort to turn around the company can proceed with them on the board," Pryce-Jones said in a telephone interview.

Thompson was formerly chairman and CEO of Wachovia Corp, the North Carolina bank bought by Wells Fargo & Co in 2008. Hammergren is chairman and CEO of U.S. drug wholesaler McKesson Corp.

Thompson chairs the HP board's audit committee, while Hammergren chairs the board's finance and investment committee, according to HP's proxy.

Pryce-Jones also said the adviser will urge investors to vote against the renewal of HP's auditing firm Ernst & Young.   Continued...

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