HP chairman Ray Lane is giving up his role amid ongoing shareholder disapproval of HP's troubled Autonomy acquisition.
Lane will remain on HP's board as a director but has given up his position as chairman, HP said yesterday. In addition, two of HP's longest-serving board members have resigned their seats altogether.
The news comes after some of HP's largest shareholders tried to have Lane and other HP directors voted off the board at a meeting last month.
HP's board has been under fire for its role in approving HP's acquisition of Autonomy for $10.3 billion in 2011. HP subsequently took a massive charge for the acquisition, saying Autonomy's business wasn't as healthy as it thought.
HP director Ralph Whitworth will take over as chairman while the company finds a permanent replacement for Lane, HP said.
The board members who have resigned are John Hammergren and G. Kennedy Thompson. They were reelected to the board last month but, like Lane, received low approval ratings.
A former Oracle president, Lane became chairman of HP in November 2010, around the same time that HP appointed former SAP chief Leo Apotheker as CEO. Apotheker replaced Mark Hurd, who had left after a scandal.
Apotheker's time at HP was brief and rocky. It included the Autonomy acquisition, a botched decision to sell HP's PC business, which was later reversed, and the scrapping of HP's smartphone business. Apotheker was replaced within a year by current CEO Meg Whitman.
HP's board has already changed considerably in recent years, but some investors feel the changes haven't been enough. Hammergren and Thompson are the longest-serving members of the current board, having joined in 2005 and 2006, respectively. They resigned Thursday and will officially depart at HP's next board meeting on May 24, according to an HP regulatory filing. Lane's resignation as chairman is effective immediately.
"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," Lane said.
"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," he said.
Whitman is leading "a Herculean turnaround," he added.
Lane was reelected to the board last month with 59% of HP shares voted in his favour. Thompson received 55% and Hammergren 54%. Approval ratings for directors are typically much higher, and some fallout from the low votes was expected. Whitman received a 98% approval rating.
HP will recruit a permanent chairman as soon as possible, and it hopes to hire two replacement board members by the end of the year, Whitworth, the interim chairman, said in an open letter published yesterday.
The investment firm he represents, Relational Investors, owns roughly $800 million worth of HP's stock, Whitworth said.
"So, I can assure you that my interests are completely aligned with those of our shareholders," he said.