In an effort to quiet unhappy investors, Hewlett-Packard Company (NYSE:HPQ)’s Executive Chairman Ray Lane and three board members will meet with 20 of the company’s largest shareholders on Monday.
The meeting comes before Hewlett Packard’s (H-P) 11-member board of directors are up for re-election in a March 20th vote. Investors have expressed frustration at mishaps by the company from its leaders; this includes the $11 billion purchase of the U.K. software company Autonomy.
Lane had approved the transaction and then it fell flat.
The labor federation Change to Win (CtW) is driving the investor movement to vote against the re-election of two Hewlett-Packard directors, John Hammergren and G. Kennedy Thompson. Hammergren, a board member member since 2005, is the chief executive of McKesson Corporation (NYSE:MCK) and oversees H-P’s finance committee, while Thompson, on the Board of Directors since 2006 and the former chief of Wachovia Corp., is the chairman for H-P’s audit committee.
William Patterson, the executive director of CtW Investment Group, which is an arm of labor federation Change to Win, said to The Wall Street Journal, “H-P shareholders are once again suffering from disastrous deal making, lack of accountability and flawed oversight.”
The action of rallying investors against the company will continue, said Patterson, unless it commits “to changing the leadership of the board and its key committees.”
The Wall Street Journal reported that the number of investors who agree with CtW’s concerns is unknown and voting no against the board members will likely not succeed. But talking with the disgruntled group on Monday exemplifies H-P’s concern about the matter.
Patterson has forecast that Monday’s participants represent the owners of approximately 135 million (about 6.9%) shares of H-P’s nearly 1.95 billion outstanding shares.
As for the list of attendees, it hasn’t been disclosed, but the money manager Capital Research & Management, H-P’s No. 4 largest shareholder, is expected to be there.
Rajivs Gupta, the former Rohm&Hass Co. chief executive, is the lead independent director for H-P and he will attend Monday’s meeting, reported The Wall Street Journal. He noted that its discussion will be “part of the investor outreach that the board has been fairly active in during the past two years.”
The company has said prior to its annual meetings, that it will gather with investors as well as directors.
An H-P spokesman said, ”We look forward to discussing any concerns this particular group of investors may have.”
In the last three years, Hewlett-Packard Company (NYSE:HPQ)’s shares have dropped over 62%. It has faced challenges from executive turnover and changes in strategic direction. Meg Whitman is currently holding the reins at the company as CEO.
On Friday, Hewlett-Packard Company (NYSE:HPQ) shares jumped 12% to $19.20 after it reported better-than-expected earnings. Shares are currently trading up 0.36% at $19.27.