Meg Whitman has been appointed as HP’s chairman, as Whitworth steps down due to ill health
Hewlett-Packard has added to the duties of CEO and President Meg Whitman, and appointed her chairman of the board. The tech giant also expanded its board, with the addition of a 12th member.
The decision to add the chairman role to Whitman’s responsibilities comes after activist investor Ralph Whitworth stepped down as interim chairman this week for health reasons, reportedly cancer.
Ralph Whitworth had been appointed as interim chairman in April 2013 following the resignation of Ray Lane. That interim chairman appointment was only intended until HP identified a permanent chairman, but the company had still had not filled the position when Whitworth eventually stepped down due to ill health.
Whitworth is a founder of Relational Investors LLC, a private investment management firm based in San Diego, California. He is also stepping down from that firm.
HP also announced a couple of other changes to its existing board. HP said that current director Pat Russo has been appointed lead independent director. Additionally, Klaus Kleinfeld, chief executive and chairman of Alcoa, has been appointed to the board, bringing the total number of board members to 12.
“I’m extremely pleased that the board has elected Meg its chairman and Pat lead independent director,” said Ralph Whitworth, departing chairman of HP’s board. “Meg and Pat are unwavering in their commitment to the corporate governance, capital allocation and management incentive principles that drove our decisions these past three years. They will stick to and strengthen the critical practices and disciplines we’ve put in place. HP is in great hands.”
“Meg has been an outstanding leader since coming to HP, and we believe that as chairman she can most effectively drive the turnaround and continue to build value for our shareholders,” said Gary Reiner, chairman of the Nominating, Governance and Social Responsibility Committee.
None of the current board of directors are thought to have been in their board positions for more than five years.
Meg Whitman has been in charge at HP since 2011, but prior to that HP had been through a number CEOs, and the company made a number of controversial acquisitions and strategy u-turns as it sought to counter the downturn in the PC industry and increasing move towards mobile computing.
And despite the fine sounding rhetoric from the company, the decision to combine the roles of chairman and CEO with just one person is unusual in large publicly listed companies. Besides managing the board of directors, the chairman is supposed to oversee the effective management of the company, and support the CEO.
“The move is somewhat surprising given the record of HP and its board,” Bill Kreher, an analyst at Edward Jones & Co, was quoted as saying by Bloomberg. “Meg has done a good job executing the turn around.”
This turnaround included HP axing an ever increasing number of jobs.
HP had initially opted to axe 27,000 jobs (May 2012), but then decided to increase this to 29,000 staff (September 2012). It then decided to increase the number of job cuts to 34,000 positions (December 2012). And guess what? This year it warned it may to increase the job cuts by another 16,000 positions (May 2014), meaning HP looks set to axe a grand total of 50,000 positions.
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