Another Director Out at Hewlett-Packard: It’s Lawrence Babbio
Hewlett-Packard just filed a notification with the U.S. Securities and Exchange Commission that another director is not standing for reelection. This time it’s Lawrence Babbio, the former president and vice-chairman of Verizon, who is also an adviser to the private equity fund Warburg Pincus.
This makes the second director to leave HP in as many weeks.
HP’s statement from the filing, in full:
On January 24, 2012, Lawrence T. Babbio, Jr. notified the Board of Directors of Hewlett-Packard Company (“HP”) that he will not stand for re-election at the next annual meeting of stockholders. Mr. Babbio will continue to serve as a director of HP until HP’s next annual meeting of stockholders, which is scheduled to be held on March 21, 2012.
Ten days ago, it was Sari Baldauf, a former Nokia networks executive, who said she would not stand for reelection.
Babbio (pictured at right) and Baldauf were both targeted last year by shareholder activist groups like Institutional Shareholder Services and Glass Lewis, who urged shareholders to vote against their reelection to HP’s board. Their concern was that HP’s board seemed too chummy.
ISS argued at the time that Babbio was the only member of the board’s Nominating and Governance Committee to participate in the discussions of what it called an “ad hoc committee” that brought five new directors to HP’s board during the 11 months that Léo Apotheker was CEO. Among those new directors brought on: Current CEO Meg Whitman and former Alcatel-Lucent CEO Patricia Russo.
In its report, Glass Lewis had urged shareholders to withhold a vote for Babbio — and had done so in 2007 and 2009, as well — saying that as chairman of the board’s HR and compensation committee, he hadn’t worked hard enough to link performance to pay. According to the Glass Lewis analysis, HP paid its executives more than the median of 33 other similarly sized companies. “Overall the company paid more than its peers, but performed moderately worse than its peers,” it said. On executive pay, Glass Lewis gave HP a “D” on a scale of A to F.
Now, the bigger question is: Who will be nominated to replace them? HP’s shareholder meeting is seven weeks away.