HP chairman resigns after Autonomy deal
Bloomberg in San Francisco
Hewlett-Packard chairman Ray Lane is giving up his chairmanship two weeks after investors re-elected him in a narrow majority of votes, issuing a rebuke of his oversight of the botched acquisition of Autonomy.
Directors G. Kennedy Thompson and John Hammergren are departing, while Ralph Whitworth will take over as interim board chairman, HP said yesterday. Lane "decided to step down", Whitworth wrote in a blog posting.
The second board overhaul in two years underscores shareholders' dissatisfaction with the firm's performance and the takeover of Autonomy. The US$8.8 billion write-down of the software maker, unveiled in November, capped three years of management upheaval, strategy shifts and slowing growth that hammered the shares and complicated efforts for chief executive Meg Whitman to revive growth at HP.
"Lane is clearly the fall guy for the botched Autonomy acquisition," said Bill Kreher, an analyst at Edward Jones. "When he was announced as the chairman, we were pleased with that decision, but at this time it's in the best interest of the company to move on."
Lane joined the board in November 2010 after the departure of chief executive Mark Hurd over ethics concerns.
HP and its investors looked to Lane - a former chief operating officer of Oracle with deep roots in enterprise technology and venture capital - to bring stability and help navigate a transformation away from personal computers into products and services for corporate customers.
His reign instead came to be associated with the ill-fated tenure of chief executive Leo Apotheker, who was ousted after 11 months on the job; strategy shifts, such as a flip-flop over whether to sell the personal computer division; and acquisitions, including Autonomy, that did little to revamp HP.
"It's the right thing, even if a little late," said Erik Gordon, a professor at the Ross School of Business at the University of Michigan. Lane's "legendary status didn't do anything for HP".
"In the coming months you will see further evolution of our board," Whitworth wrote in the blog entry posted on the "HP Next" website. "We will recruit a world-class chairman to take my place as soon as possible … While sooner is better, rest assured we will not allow the rush of time to compromise our focus on recruiting the best of the best."