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HP CEO Apotheker gets heat for board involvement

Agam Shah and Dan Nystedt | March 10, 2011
A stock advisory firm says the HP CEO was involved in board member selection, which is against company guidelines

The vote is scheduled for March 23 at the annual meeting of stockholders in Arlington, Virginia.

HP in a statement said that the ISS report "misinterpreted" HP's process of identifying and nominating directors.

"HP has strong and robust governance practices. We believe that ISS's recommendation is based on their misinterpretation of the process that HP employed in identifying, selecting and nominating our directors. We do not believe that it would be in the best interests of HP's stockholders to lose the service of the experienced and dedicated Board members who have been delegated primary responsibility for establishing and maintaining those governance practices and who, by any standard, have carried out their obligations in a fully compliant manner," said HP in an e-mail statement.

The alleged involvement of Apotheker in board activities may be against HP's internal guidelines, but there's no reason to think it will affect the company's performance, said Ezra Gottheil, senior analyst at Technology Business Research.

The board and management were not on the same page when Hurd was CEO, with different visions for driving the company forward, Gottheil said. Apotheker will fuse any tensions and bring both groups on the same page.

It's not even the case that the board wants to radically change HP's operations after Hurd departed, Gottheil said. The result of Hurd's tenure is that half of the business that relies on scale is moving along quite well, and with Apotheker, the company will be able to explore new opportunities.

"I don't see any real problems with the changeover in the top. The company is fairly well set," Gottheil said.

 

 

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