HP's Board: Do You Trust These 11 People?12:00 PM EST Thu. Nov. 29, 2012
Hewlett-Packard's 11-member board of directors is coming under intense scrutiny in the wake of the company's disclosure that it was taking an $8.8 billion noncash impairment charge related to its $11.1 billion acquisition last year of Autonomy. HP claims it was duped into paying too much for Autonomy, a cloud computing enterprise software company. HP solution provider partners say the blame for the Autonomy fiasco lies in large part with HP's board of directors. Here are the 11 members of the board who are under fire in the wake of the Autonomy debacle.
The former Oracle and Booz Allen executive came to the HP board in September 2010 with former HP CEO Leo Apotheker. In fact, Lane initially was a big supporter of Apotheker's drive to increase HP's enterprise software footprint with a game-changing acquisition. Lane, however, played a key role in ousting Apotheker, hiring Meg Whitman and giving himself a higher-level post, moving from nonexecutive chairman to executive chairman. Corporate governance experts have cringed at Lane's move to executive chairman. "You look for an independent chair," James Post, a professor at Boston University School of Management, told MarketWatch last year. Lane's total compensation is listed as $10.6 million in the HP proxy.
Whitman, the former eBay CEO who is being paid no salary with $16.5 million in stock options for fiscal 2011, was appointed to the HP board of directors in January 2011 after making an unsuccessful run for governor of California in 2010. The Princeton University and Harvard MBA graduate, who spent $140 million of her own money in the California governor's race, voted for the Autonomy acquisition. Whitman took on the CEO role in September 2011 after she and other board members fired Apotheker. Whitman says she now regrets voting for the Autonomy acquisition and has pointed the finger for the Autonomy debacle directly at Apotheker, former HP strategy chief Shane Robison and Autonomy accounting firm Deloitte.
The technology entrepreneur who has built a second career as a venture capitalist joined the HP board in September 2009. HP bought Opsware, a company Andreessen co-founded, in 2007 for $1.6 billion. Andreessen is widely credited with playing a key role in forcing former HP CEO Mark Hurd to resign and picking Apotheker as CEO. Andreessen's total compensation is listed as $310,355 in the HP proxy statement.
The CEO of consulting company Booz & Company joined the HP board in January 2011. Banerji, who studied game theory and econometrics at Northwestern University, told the Financial Times in 2009 that the Booz "internal metric" for a client engagement is "10 times" fees. "We think value, not price," he told the publication. Banerji's total compensation is listed as $326,037 in the HP proxy.
As chairman and CEO of Rohm and Haas Company, Gupta successfully negotiated a $15 billion takeover by Dow Company in 2009. He joined the HP board in January 2009 and became lead independent director in November 2011. A Rohm and Haas bio says the native of India credits his mother, who earned a B.A. in the 1930s in India, and his father, a civil engineer, with teaching him and his siblings the "importance of personal values." Gupta, whose HP compensation amounted to $355,868 in fiscal 2011 according to the HP proxy, also sits on the boards of Delphi Automotive, Tyco International, The Vanguard Group and several private companies.
The president, CEO and chairman of McKesson Corp., a health-care services information technology company, is the longest-standing HP board member, having joined the board in 2005. An Associated Press report notes that Hammergren has experience in the "aftermath of an accounting scandal" since McKesson named him as CEO after "revealing it had been conned into buying software maker HBO & Co. for $12 billion in 1999." Hammergren's HP board compensation is listed as $348,188 in the fiscal 2011 proxy.
A 30-year HP veteran, Livermore bleeds HP blue. She joined the HP board of directors in June 2011 after stepping aside as executive vice president in charge of HP's Enterprise Business. Livermore was a longtime proponent of HP's aggressive services expansion. Long before HP was a big player in services, Livermore boasted in 2002 that HP was cherry-picking services talent from IBM Global Services and EDS, which HP acquired in August 2008 for $13 billion. Four years later, HP took an $8 billion write-down on the EDS deal. Livermore's HP board compensation is not listed on the latest HP proxy because she was still an HP employee in 2011. But a Computer Weekly story pegged her 2008 total compensation at $20.5 million. Livermore also sits on the board of United Parcel Service
The onetime senior vice president and CIO of General Electric and Harvard Business School graduate joined the HP board in January 2011. As GE CIO, Reiner did business with Apotheker when Apotheker was at SAP. At GE, Reiner oversaw a $55 billion supply chain and made a game-changing deal to purchase a supply chain Software-as-a-Service application for GE. Reiner also serves as a special adviser to General Atlantic, a private equity company. Reiner's HP compensation is $317,646 as listed in the HP proxy.
Russo, former CEO of telecommunications giant Alcatel-Lucent, also did business with Apotheker during his SAP tenure. Russo is widely credited with returning Lucent to profitability in 2004 after three years of losses and left Lucent in 2008. A Businessweek article in June 2008 noted that Russo was "vilified by many former employees of Lucent Technologies where as CEO she oversaw a brutal downsizing before its merger with Paris-based Alcatel." Russo's HP board compensation is $290,676 according to the HP proxy. She also sits on the board of directors for General Motors, Merck & Co. and Alcoa.
The second-longest-standing HP board member, the former chairman, president and CEO of financial services company Wachovia Corp. joined the HP board in November 2006. A Wikipedia reference states that Wachovia's $26 billion acquisition of GoldenWest under Thompson's leadership "ultimately led to the end of his career at the firm, [with] write-downs and losses far exceeding the price paid to acquire GoldenWest, and the fire sale of Wachovia to Wells Fargo." Thompson's HP board compensation is listed as $346,370 in the latest proxy.
The co-founder of Relational Investors LLC, a private investment management firm based in San Diego, joined the HP board in November 2011. At the time HP and Relational "entered into a letter agreement under which Relational will support the HP board and the board will nominate and support Whitworth, for the next two years, as long as Relational continues to be a significant stockholder of HP." Whitworth's HP board compensation is not listed in the most recent proxy.