The changing of the guard at HP’s sparsely attended annual meeting marked the first time in the 63-year history of Hewlett-Packard that no member of the founding families had a seat on the board.
The Hewlett and Packard families — with about 18 percent of HP stock — strongly opposed the $18 billion merger that Chief Executive Carly Fiorina championed in a hard-fought and often nasty four-month proxy battle that culminated in a raucous March 19 vote, which HP says it won but which Hewlett is challenging.
Friday’s meeting was attended by about 300 shareholders in the same cavernous Silicon Valley concert hall that hosted the contentious merger vote where throngs of protesters held placards outside the hall and challenged Fiorina.
“I believe dissent should be respected and valued,” shareholder Andy Black told Fiorina, one of two shareholders who questioned Walter Hewlett’s exclusion from the board, prompting the strongest applause of the day.
Fiorina said Hewlett had turned from a “dissenter” to an “adversary” when he filed suit to stop the merger after shareholders had voted, and in doing so had damaged HP’s reputation. “The shareholders have spoken and we must move on,” she said.
Over 80 percent of the ballots were cast in favor of the slate of directors put forth by the company, Fiorina said.
Aside from the board election, the agenda did not address the contested merger. HP says it won the March 19 merger vote by a narrow margin, although the results have still not been officially certified.
LAWSUIT RULING NEXT WEEK
HP refused to renominate Hewlett after he sued to overturn the merger vote, accusing Fiorina and other executives of covering up weak business projections and improperly pressuring a key shareholder, Deutsche Asset Management, to change its vote.
By the time he launched his suit, the deadline for shareholders to nominate other directors had passed.
A Delaware business court is considering the suit by Hewlett to throw out the merger vote, and Hewlett is examining and challenging the preliminary count of the vote made by an independent vote counter.
Lawyers from both sides must file by midnight on Friday their closing briefs in the suit, the focus of an emotional three-day trial that ended on Thursday in which Fiorina said she had neither bought votes nor lied to win the deal.
“I was in fact glad to have HP management stand up in a court of law and say what really happened,” she said. A Hewlett spokesman declined to comment, although Hewlett himself had previously said he would prefer to remain on the HP board.
Observers generally expect the Delaware judge to release his decision on Monday, or Tuesday at the latest.
Shares of Compaq have closed in on the price implied by the terms of the merger since the trial began on Tuesday, indicating that expectations were strong the deal would close.
HP shares had fallen 2.4 percent, or 42 cents, to $16.96, while Compaq shares dropped 2.68 percent, or 28 cents, to $10.18 on the New York Stock Exchange.
“Walter Hewlett has rested his case and we think he is far short of having enough evidence for his lawsuit to succeed,” said Andrew Whittaker, head of arbitrage research at Lehman Bros.
HP shareholders also voted to confirm Ernst & Young as the company’s auditor. They rejected two resolutions by activist shareholders, both of which management opposed.
One proposed the company adopt a set of human and labor rights standards in China and the second would have pledged the company to prepare a report on increased recycling of personal computers. However, each won support of about 6 percent of shareholders, a level which the recycling proponents had said could be enough to draw management’s serious attention to the issue.