Hewlett-Packard's board is fighting to retain its authority after narrowly surviving a shareholder rebellion which saw big protest votes against the re-election of five directors at its annual meeting.
Investors rounded on HP, which is under pressure after a series of disastrous acquisitions, including an $8.8bn writedown on its takeover of the British software firm Autonomy.
The two longest-serving directors, John Hammergren and Kennedy Thompson, were rebuked for a series of missteps including the ousting of two chief executives in as many years, with 46% and 45% of votes cast against their re-election.
Chairman Raymond Lane attracted the third largest tally of no votes, with 41% against his return, while 20% voted against the lead independent director, Ralph Gupta, and 30% against Silicon Valley high-flyer Marc Andreessen.
A spokesman for one of the largest North American pension funds, the California Public Employees' Retirement System (Calpers), took the floor at the meeting in Mountain View to express "extreme concern with HP's path in recent years".
The fund, which owns more than 8m HP shares, voted against five directors and joined 14.7% of investors in protesting at the reappointment of Ernst & Young as HP's auditor – the firm has performed the role for 14 years and over $20m of its $50m in fees for 2012 were for non-audit work.
A proposal put forward by investors that all directors retain until reaching retirement age a significant proportion of shares acquired through company equity schemes was supported by a large minority of over 27% of votes.
All 11 members of the board were re-elected with the required majorities. However, shareholders supported a proposal allowing them to nominate candidates for the board in future years.
Shareholder activist Bill Patterson of the CtW Investment Group said the change would be "of little value unless this company can demonstrate it has active independent directors on the job protecting shareholder rights".
The shareholder rebellion, one of the largest faced by the board of a major US listed company in recent years, was compounded by the latest salvo from Autonomy founder Mike Lynch.
The British entrepreneur is battling to clear his name after being accused of manipulating Autonomy's accounts in order to inflate its value. Lynch is worth an estimated £480m following HP's $11bn acquisition of his software firm in 2011.
In an open letter published Wednesday morning, Lynch, who rejects HP's accusations of false accounting, said the company had acted in an "aggressive and unusual manner" over recent months. He called again for HP to produce any evidence it had to back up the claims against him.
HP's chief executive, Meg Whitman, defended her board, which has overseen a halving of the company's share price in two years. "Our objective is to build back your shareholdings," she said. "My view about the board of directors is the lineup we have right now is helping us turn around the company."
Activist investor Ralph Whitworth, who joined the HP board in 2011, said work was ongoing to find new directors: "Last fall wasn't the most opportune moment to reach out and invite directors on the board, but things are changing and you can expect some evolution of the board over the coming years months maybe."
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