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March 20, 2011 9:43 pm
Ray Lane rejected complaints that Léo Apotheker, the technology conglomerate’s new chief, had been involved in the process, telling the Financial Times that he alone had interviewed all his fellow directors and decided who should be asked to leave.
Institutional Shareholder Services, the advisory firm, this month recommended that shareholders vote against members of the board’s nominating committee at the annual meeting on March 23 for allowing “the direct participation of Apotheker in the appointment of five new directors”.
Mr Lane disputes that argument, however. “I was the only one that knew whether this particular board member could work together with the rest or dwell on the past,” said Mr Lane, who joined HP four months ago.
“The board unanimously gave me the authority to do what I needed to do.
“They all would have stepped down if I wanted them to.”
The HP board fractured last year after a challenge to Mr Hurd’s stewardship.
A sexual harassment complaint by a former HP contractor against Mr Hurd triggered an inquiry that convinced a majority of the board that he had shown poor judgment, and he was given a large severance payment to resign.
The subsequent appointment of Mr Apotheker puzzled some investors because his reign of less than a year as head of SAP, the business software maker, saw a fall in the German group’s profits.
Those concerns were amplified by the HP board shake-up in January.
Mr Lane defended the board’s conduct, saying he had initially sidestepped the nominating committee and formed an ad hoc panel to seek new directors only because he wanted a group that could work with him through the winter holidays and vet candidates in time for this week’s meeting.
He said he asked Mr Apotheker, who knew more overseas chief executives, as well as two outside directors for help, and together they came up with a list of about 20 candidates. Of the five that emerged and were turned over to the nominating committee, only one had been put forward by Mr Apotheker, Mr Lane said.
ISS and others who have objected to the process did not know what had happened and “made it sound as though Léo was going out and picking his buddies”, Mr Lane said.
“We got some usable names from him, but we only ended up taking one to the committee.”
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