Hewlett-Packard Board Issues Statement Against Allegations

Hewlett-Packard Board Issues Statement Against Allegations

The board of Hewlett-Packard (NYSE:HPQ) defended itself from allegations of lack of leadership and errors in judgment. It also said that changing the board will only weaken it.

A letter released before the March 20 annual meeting indicated that there were positive results on its finances and that the foundation set the company for a turnaround. Shareholders were advised by Institutional Shareholders Services, a company that advises investors, to contest the reelection of the chairman of the company and two of its directors.

G. Kennedy Thompson, John Hammergren and Ray Lane were criticized for the manner Hewlett-Packard (NYSE:HPQ) handled the acquisition of Autonomy, a software company from the UK.

However, Glass, Lewis &Co, another advisory company, supported the reelection of Lane although it was against the reelection of Thompson and Hammergren in addition to Marc Andreessen and Rajiv Gupta. The company defended the expertise and credentials of Thompson, Hammergren and Land, and indicated that the board was able to make the necessary changes to ensure that it was effective.

Changing board members would not be in the interest of Hewlett-Packard (NYSE:HPQ) and is unnecessary, the board added.

Around $8.8 billion of the value of Autonomy was written down by the company which it attributed to bad accounting in the company. However, the former head of Autonomy denied the accusation.

The company also indicated that the UK Serious Fraud Office informed it of an investigation in connection to the allegations. The US Department of Justice is reportedly also investigating the company.

The two advisory companies also advised against voting for the executive pay practices of Hewlett-Packard (NYSE:HPQ).

The company defended its compensation plan and indicated that the pay structure of senior executives was modified to fit the cash flow and the return on invested capital of the company.

Although shares of Hewlett-Packard (NYSE:HPQ) are higher by 48 percent since the year started, it declined by $0.03 as it ended with $21.00 during after-hours trading recently.

Posted by James Fried on Tuesday March 12 2013, 11:50 AM EST. Ref: Fox News. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0