NYC Pension Funds Push to Replace Two HP Directors
New York City's public pension funds on Friday joined in an effort to oust two Hewlett-Packard directors because of their support for the company's 2011 acquisition of British software maker Autonomy.
City Comptroller John C. Liu said the New York City Pension Funds will vote against directors John H. Hammergren and G. Kennedy Thompson "because of their failure to protect investors from costly, misguided acquisitions." Two key proxy advisory firms have also recommended voting against those directors.
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"As the two longest-serving directors, they also bear responsibility for approving HP's ill-advised acquisitions of EDS and Palm, and for the board's hasty decision to hire Leo Apotheker, whose short-lived tenure as CEO ended shortly after the Autonomy acquisition that he engineered," Liu said.
The city's various funds hold a total of 5.5 million shares in HP, worth nearly $116 million at Thursday's close. While not among the company's largest shareholders, the city pension funds are prominent investors and their decision is likely to be widely noticed by other municipal shareholders.
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HP shares rose 0.7 percent to $20.99 in afternoon trading.
On Tuesday, two key proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, also recommended voting against those two directors at HP's shareholder meeting on March 20.
ISS, closely followed by investors seeking guidance on controversial issues, issued a rare call as well to vote against board chairman Ray Lane, a managing partner at high-powered Silicon Valley venture capital firm Kleiner Perkins.
Glass Lewis also suggested shareholders vote to remove two other directors -- venture capitalist Marc Andreessen and Rajiv Gupta.
Both firms blamed the directors for inadequate due diligence relating to the acquisition of Autonomy.
HP, which acquired the British firm for $11.1 billion, took a massive writedown on its value last year.
