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In a jaw dropping move, HP has agreed to a measure that could give shareholders the power to replace board members, the Wall Street Journal reports.HP plans to give stockholders who own at least 3% of HP shares for at least three years the power to nominate up to 20% of the company’s directors, the company said.
And the vote would be binding.
HP’s next annual meeting will be held next month. But the vote to change the bylaws to approve this kind of election of directors won’t occur until the 2013 annual meeting, says the WSJ. The story also notes that only four HP shareholders would qualify to participate in such a vote.
For the next meeting, the proxy lists only board members that the company has nominated [PDF]. All of them are already serving on HP’s board. Currently, six of HP’s 11 directors are new, put in place in 2011 (Shumeet Banerji, Ann M. Livermore, Gary M. Reiner, Patricia F. Russo, Meg Whitman, Ralph V. Whitworth). Its executive chairman, Ray Lane, is a relative newcomer, too. He’s been in the role a little over a year, since November, 2010.
HP’s leadership has been in turmoil for years, with wild twists and turns including a spying scandal, the ousting of CEOs, and resignations of board members including its chairman.
With Ray Lane and Meg Whitman in charge, employees say they hope the worst drama at the board is over. But two long-time board members have recently quit, and HP hasn’t yet said what its plans will be to fill those spots. Last year, a shareholder watchdog group, Institutional Shareholder Services, criticised HP’s then-CEO Leo Apotheker and Lane in how they elected five new board members to replace four that had resigned.