Hewlett-Packard shareholders on Wednesday reelected all 13 directors to serve on the company's board for the next year, ending controversy surrounding CEO Leo Apotheker's alleged role in identifying potential nominees.
On March 2, Institutional Shareholder Services, a shareholder advisory firm, said that Apotheker broke internal company policy by being directly involved in the selection process of new directors to the company's board. Apotheker's alleged involvement was against HP's governance guidelines as the charter calls for the process to be conducted by independent directors only.
According to preliminary results at the annual shareholder meeting held in Arlington, Virginia, HP shareholders reelected nominees Lawrence Babbio, who has been a director since 2002, and Sari Baldauf and G. Kennedy Thompson, who have been board members since 2006. ISS advised shareholders to vote against the three nominees, saying they failed to enforce the company's guidelines for identifying potential board member candidates.
HP's board over the past year was criticized over the resignation of former CEO Mark Hurd in August amid sexual harassment allegations and subsequently over the appointment of Apotheker, who was previously CEO of SAP, which was sued by Oracle for intellectual property theft by a former SAP subsidiary.
After Hurd's resignation, HP added five new members to the board of directors: Shumeet Banerji, CEO of Booz & Co.; Gary Reiner, former CIO of General Electric; Patricia Russo, former CEO of Alcatel-Lucent; Dominique Senequier, CEO of AXA Private Equity; and Meg Whitman, former president and CEO of eBay.
ISS said that at least four of the five director nominees had connections with Apotheker. ISS said Senequier was a Schneider Electric board member along with Apotheker, and three other nominees have been customers of SAP.
HP previously said that ISS misrepresented the process for electing board members.
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