Acknowledging shareholder unrest, Lane gives up his post "to reduce any distraction from HP's ongoing turnaround."
Hewlett-Packard announced Thursday that its Chairman Ray Lane is stepping down in a surprise move that comes just two weeks after Lane and two other board members narrowly avoided being ousted by shareholders at the company's annual meeting.
"After reflecting on the stockholder vote last month, I’ve decided to step down as executive chairman to reduce any distraction from HP’s ongoing turnaround,” said Lane, who will continue to serve as a director.
HP also announced that two board members who came under scrutiny last month, John H. Hammergren and G. Kennedy Thompson, have decided to leave the board.
The unrest at HP was stoked by the botched acquisition of Autonomy Corp., which HP bought for $13.1 billion under the watch of Lane and former CEO Leo Apotheker, who Lane had a hand in hiring but who was fired after serving in that post for less than a year. Apotheker's replacement, Meg Whitman, was forced to take an $8.8 billion write-down on Autonomy late last year. HP claims it was misled about Autonomy's finances, an allegation that Autonomy founder and former CEO Mike Lynch denies. Autonomy's pre-sale finances are being investigated by regulators in the U.S. and U.K.
Lane, a former president of Oracle and currently a managing partner of venture capital firm Kleiner Perkins Caufield & Byers, was a strong advocate of the Autonomy deal, as was Thompson, who was a member of the committee that oversaw the acquisition. The scale of the writedown sent HP's shares plummeting and led to last month's narrow 58.9% shareholder support to re-elect Lane to his post.
Lane will be replaced on an interim basis by Ralph Whitworth, an HP director and principal at Relational Investors, an activist fund that "often gets companies to change course by winning a directorship or threatening proxy fights," according to The Wall Street Journal.
Whitworth joined HP's board in late 2011 and has taken an active role on the board and in advising Whitman. HP announced that the board is commencing a search for a permanent nonexecutive board chairman.
"From here we will continue to recruit outstanding directors, strengthen our governance and do the best we can -- the best we know how -- for stockholders," said Whitworth in a prepared statement. "Meg [Whitman] is leading a Herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and HP’s entire team to succeed."