March 9 (Bloomberg) -- New York City Pension Funds added pressure on Hewlett-Packard Co. to replace some directors, saying it will vote against the reappointment of John Hammergren and G. Kennedy Thompson for “failing to protect investors from costly, misguided acquisitions.”
As members of the board’s finance and investment committee, the two directors are responsible for “oversight failures,” which contributed to an $8.8 billion writedown in November related to the personal-computer maker’s purchase of Autonomy Corp. due to accounting improprieties, John Liu, New York City Comptroller, said in a statement yesterday.
Meg Whitman, Hewlett-Packard’s fourth chief executive officer in three years, is attempting to revive growth and win back investor confidence after six quarters of declining sales and profit and management missteps. The Autonomy writedown followed an announcement in August of a $9.2 billion charge, largely tied to its purchase of Electronic Data Systems Corp.
“The Autonomy debacle is the latest and most expensive in a series of ill-advised acquisitions and boardroom fiascos that have destroyed tens of billions of dollars in shareowner value,” Liu said in the statement. “While the board now appears to be taking steps to improve oversight, it will be unable to restore investor confidence without swiftly replacing these two directors.”
This week, proxy advisers Institutional Shareholder Services Inc. and Glass Lewis & Co. also urged investors to block Hammergren and Thompson’s re-election at Hewlett-Packard’s annual meeting, set for March 20.
Hammergren, chairman of the board’s finance committee, has been a director since 2005 and is also CEO at McKesson Corp. Thompson, a director since 2006, heads the audit committee.
“The board fully supports the election of each of the director nominees named in the proxy statement,” said Howard Clabo, a spokesman for Palo Alto, California-based Hewlett- Packard.
Hewlett-Packard shares have declined 14 percent in the past year, compared with a 15 percent gain for the Standard & Poor’s 500 Index. The stock rose less than 1 percent to $21 in New York yesterday.
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--Editors: Reed Stevenson, Stephen West