Pension funds pressure HP board on governance, composition

Hewlett Packard display

California State Teachers’ Retirement System, Connecticut Retirement Plans and Trust Funds, New York City Retirement Systems and other pension fund representatives urged Hewlett-Packard Co. to address corporate governance policy and board composition concerns in a conference call with four directors of the company, said Ricardo Duran, CalSTRS spokesman.

Anne Sheehan, director of corporate governance at the $161.4 billion CalSTRS, West Sacramento, was among the pension fund representatives participating in the call, Mr. Duran said.

The discussion’s focus included legacy leadership issues, such as the ouster of Mark Hurd as CEO in 2010, and Leo Apotheker, who was replaced in 2011 after about a year as CEO by Meg Whitman.

The talk included “concern that HP’s governance structure help the company address legacy issues,” Mr. Duran said.

Pension fund participants also expressed a need for HP to keep its board refreshed with new members, Mr. Duran said.

HP has a management proposal in its proxy statement that would enable a shareholder or group of up to 20 shareholders owning in aggregate at least 3% of the company’s stock to use corporate proxy material to nominate up to 20% of the directors.

“I’m sure it was a topic of discussion,” Mr. Duran said, although he couldn’t confirm it.

The discussion lasted a little more than two hours, said Mr. Duran, who said the names of the HP directors participating in the meeting were not available.

CalSTRS officials are taking the discussion under advisement before considering any possible action, Mr. Duran said.

Francis Byrd, assistant treasurer for policy who oversees corporate governance and shareholder engagement at the $26 billion Connecticut funds, confirmed he participated in the call. Mr. Byrd declined to comment on details of the discussion.

A representative of the five New York City pension funds, whose combined assets total $126 billion, also participated in the call, said Matthew Sweeney, spokesman, who said officials declined to release further details.

Other pension fund representatives participating in the call couldn’t be confirmed.

Hewlett-Packard media representatives couldn’t be reached for comment.

HP’s annual meeting is March 20.

CalSTRS owned 5.8 million shares, valued at $82 million as of Dec. 31. The Connecticut and New York City funds’ HP shares are not available.