By Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance
FORTUNE -- Last proxy season, HP achieved the dubious distinction of receiving a majority no vote from its shareholders on its executive compensation programs. According to a Council of Institutional Investors study, investors bestowed that distinction on less than 1.6% of companies, those deemed to be the worst pay offenders.
Last year, too, HP's (HPQ) board nominations process (which removed four board members and added five more) came under fire because the process did not conform to stated board policy guidelines. In the run up to the proxy filing, HP provided varying explanations about the process, which had been headed by chair Ray Lane. As a result, proxy advisory firm Institutional Shareholder Services (ISS) recommended against the election of some HP board members.
It is a new year and HP issued its new proxy last week. But the more things seem to change at the tech giant, the more they stay the same.
HP sports a different CEO this year for the third year running (Meg Whitman replaced Leo Apotheker who replaced Mark Hurd who left in August 2010). HP, yet again, is proposing a new board slate to shareholders (with two new board members and four, including the former CEO, having exited). And the proxy this year reveals the same shortcomings as it did last year: misguided compensation and board nominations.
Maybe HP has good intentions, but it's falling down on execution.
Plenty of pay, but where's the performance?
To keep things simple, let's not even get into the issue of former CEO Leo Apotheker's $25 million exit pay for failure last year. Let's focus on what's to come. HP has made some changes in its compensation policies, which it outlines in the Compensation Discussion and Analysis section of the proxy in hopes this may satisfy investors. "HP has a 'pay-for-performance' philosophy which forms the foundation of all of the HR and Compensation Committee's decisions regarding compensation," an HP spokesperson says. More
Companies may be dropping some of their more embarrassing perks, but executives are on track to make even more money this year.
By Elizabeth G. Olson, contributor
The departure of a top executive always ignites a feverish guessing game about exactly how many millions of dollars he or she is walking away with -- especially when there is a very public shove out of the executive suite.
Leo Apotheker's hurried exit from MORESep 30, 2011 5:00 AM ET
Yesterday's CEO change at HP was actually a sleight of hand. Board chair Ray Lane's consolidation of power at the company is the real story to watch. By Eleanor BloxhamSep 23, 2011 11:03 AM ET
Amid speculation that Meg Whitman may be making her way to the CEO seat at HP, there are several red flags that shareholders ought to consider, and fast. By Eleanor BloxhamSep 21, 2011 5:22 PM ET
It's not unusual for a few board members to head for the exit when a CEO gets the boot. But HP's recent board shakeup raises concerns about CEO Leo Apotheker's influence on the board.
By Eleanor Bloxham, contributor
It's a familiar corporate tale. After some hand wringing, one CEO is ousted and another is appointed. The new CEO arrives with a few PR challenges as welcoming gifts. Shortly afterward, the company will MOREJan 28, 2011 11:07 AM ET
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