California Public Employees’ Retirement System, Sacramento, is pressuring Hewlett-Packard Co. to change its board and will vote against the re-election of five directors, including Raymond J. Lane, executive chairman, and Rajiv L. Gupta, lead independent director, according to a statement from CalPERS, which oversees $254.9 billion.
The others directors opposed by CalPERS are Marc L. Andreessen, John H. Hammergren and G. Kennedy Thompson, all independent directors. The five directors have either “presided over recent failures (at Hewlett-Packard) or … lack the necessary independence for a continuing role,” the CalPERS statement said. The board has 11 members.
The fund will vote in favor of ratifying HP’s executive compensation and support company proposals to amend an executive stock incentive plan and to allow proxy access, enabling shareholders to nominate up to 20% of the board’s directors.
But the fund also will vote against ratification of Ernst & Young as HP’s auditor. “With Ernst & Young’s 14-year tenure, and the serious history of write-downs following acquisition, we consider that Hewlett Packard’s audit committee should plan for putting the audit out to tender,” the statement said.
CalPERS also will vote against shareholder proposals calling for formation of a board committee on human rights and for amending HP’s human rights policy. But the fund will support a shareholder proposal requiring senior executives to retain a significant percentage of HP shares acquired through equity pay programs until reaching normal retirement age.
CalPERS has 8.3 million HP shares; that amounts to 0.4% of the 1.9 billion shares HP had outstanding as of Feb. 28.
HP’s annual meeting is Wednesday.