Hewlett-Packard Co. plans to renominate its slate of directors -- including activist investor and interim chairman Ralph Whitworth -- according to people with knowledge of the matter, seeking stability after years of board turnover.
A renomination for Whitworth, 58, will make Hewlett-Packard one of the few companies with an activist investor as chairman. Other members of the 12-person board include Ray Lane, 67, who resigned as chairman last April amid shareholder displeasure at the company’s performance. All are set to be renominated ahead of the annual shareholder meeting on March 19, said two of the people, who asked not to be identified because the information isn’t yet public.
Chief Executive Officer Meg Whitman and the board are in the midst of a turnaround of the struggling computer maker, which is poised for a third straight year of sales declines. Hewlett-Packard, which makes personal computers, servers and printers, is trying to move past a period of upheaval including declining performance and the departure of Whitman’s predecessors, Leo Apotheker and Mark Hurd.
Shares of the Palo Alto, California-based company gained 96 percent last year, making it the 17th best performer in the Standard & Poor’s 500 Index, which rose 30 percent. The stock had declined 45 percent in 2012 and 39 percent in 2011.
Michael Thacker, a spokesman for Hewlett-Packard, declined to comment or make board members available for interviews. Hewlett-Packard can change its list of proposed directors until it releases proxy voting materials, which in recent years have been published in late January or early February.
The renominations are anticipated after a quarter of the board turned over last year. Lane resigned his chairmanship after shareholders re-elected him by a narrow margin of 59 percent last March. During Lane’s tenure as chairman, Hewlett-Packard wrestled with missed sales forecasts, an ill-fated decision to explore a spinoff of the personal computer division and a disastrous acquisition of software maker Autonomy Corp.
Former directors G. Kennedy Thompson and John Hammergren also resigned their posts last April. In July, former Microsoft Corp. Chief Software Architect Ray Ozzie joined the board, along with Jim Skinner, former CEO of McDonald’s Corp. and current chairman of Walgreen Co., and Dob Bennett, ex-CEO of Liberty Media Corp.
Whitworth, who joined the board in November 2011 and who replaced Lane as chairman last April, is principal of Relational Investors LLC. Relational held 32.7 million Hewlett-Packard shares worth $687.2 million as of Sept 30., according to a filing with the U.S. Securities and Exchange Commission.
Whitworth is one of the few activist investors to gain the chairmanship of a company he invests in, according to Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
“This is quite rare, but Ralph Whitworth is a rare individual,” Elson said. “He has respect on both the managerial and the shareholder sides.”
During Hewlett-Packard’s fourth-quarter earnings call with analysts on Nov. 26, Whitman said Whitworth is “in place for the foreseeable future” until a full-time chairman is found.
While activists sometimes join boards of companies they invest in, fewer take the chairman role. Sears Holdings Corp.’s chairman and CEO, Edward Lampert, is founder of hedge fund ESL Investments Inc. Carl Icahn, the activist investor who has taken positions in Apple Inc. and Nuance Communications Inc., was chairman of Trans World Airlines Inc. in the early 1990s.
Whitworth has also served as chairman of trash hauler Waste Management Inc. and medical-services company Apria Healthcare Group Inc., which was acquired in 2008 by Blackstone Group LP.
Lane, who had served as Oracle Corp. president in the 1990s, joined Hewlett-Packard as chairman in November 2010. Together with Apotheker, who was forced out in September 2011, Lane oversaw the company’s $10.3 billion acquisition of Autonomy, which resulted in an $8.8 billion writedown and investigations of accounting fraud.
In June, Bloomberg News reported that Lane, who is also a partner emeritus at venture-capital firm Kleiner Perkins Caufield & Byers, owes a $100 million tax bill to the Internal Revenue Service stemming from a disallowed tax shelter.
Other members of Hewlett-Packard’s board include Patricia Russo, former CEO of Alcatel-Lucent SA, and venture capitalist Marc Andreessen.