Hewlett-Packard Company (NYSE:HPQ) approved a 10 percent dividend increase in its annual shareholders meeting on Wednesday, which some analysts believe in an attempt to curry favor with its shareholders.
The company faced shareholder displeasure over its $11.1 billion purchase of Autonomy Inc and a few months ago, Hewlett-Packard announced a write-down of $8.8 billion related to alleged fraud at Autonomy.
Hewlett-Packard Company (NYSE:HPQ), which has about 2 billion outstanding shares, said the quarterly dividend will be increased from 13.2 cents to 14.52 cents starting with the next dividend announcement that is expected in May, 2013. The increased payout will cost the company an extra $106 million a year.
The company’s previously announced dividend, which is payable on April 3 ,will remain the same at 13.2 cents a share.
The IT giant’s shareholders re-elected all of its directors during the annual meeting, but a few shareholders opposed the re-election of chairman Ray Lane, independent directors John Hammergren and G.K. Thompson.Hammergren is the head of Hewlett-Packard Co. (NYSE:HPQ)’s finance committee while Thompson run the audit committee. Two other directors Marc Andreessen and Rajiv Gupta were also opposed by some shareholders.
Only 58.9 percent of shareholders voted in favor of chairman Ray Lane. Mr. Hammergren was re-elected with 53.9 percent favorable votes, Mr. Thompson was favored by 55.2 percent shareholders, Mr. Andreessen had 69.8 percent shareholders saying yes to his re-election and Mr. Gupta received 80.3 percent of the votes. A whopping 98 percent of shareholders voted in favor of CEO Meg Whitman.
According to Hewlett-Packard Company (NYSE:HPQ)’s regulations, a candidate must receive at least 50 percent of the votes to become a board member. Otherwise, they must submit their dresignation, and the company board will decide whether to accept it.
The shareholder opposition was due to $8.8 billion Autonomy write-down, asserting that Autonomy’s former management misled HP about its finances. In an open letter to H-P shareholders, Autonomy Inc. founder and former chief Mike Lynch rejected all the allegations of Hewlett-Packard Co. (NYSE:HPQ), saying that the problems were due to HP’s own mismanagement of Autonomy after the acquisition. He asked the Silicon Valley tech giant to disclose the details of fraud allegations.
Hewlett-Packard Company (NYSE:HPQ) shares were down 1.18 percent to $22.65 at 10:17 AM EDT.