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Hewlett-Packard won’t be forced to introduce a “Carly clause” into its executive compensation policies.
HP
shareholders rejected two proposals related to executive compensation
and voting rights at the company’s annual stockholder meeting Wednesday
in Los Angeles, which was available via Webcast. The first proposal
would have allowed HP’s board of directors to recoup bonuses paid to
executives in the event of a restatement of earnings or a “significant,
extraordinary write-off,” citing the performance of deposed HP CEO
Carly Fiorina as an example.
Fiorina received a $21 million
severance package from HP when she was fired as CEO in early 2005. This
package, which has also provoked a lawsuit, was awarded with no
allowances for the company’s performance over that period, according to
the proposal from shareholder Nick Rossi, acting on behalf of Katrina
Wubbolding.
HP Chairman Patricia Dunn noted that the company already
has a policy that allows it to recover compensation that was awarded
before the discovery of fraudulent conduct, and that the proposal would
impose restrictions that were too vaguely worded to attract future
executives. The proposal was soundly defeated.
Shareholders also
rejected a proposal that would have required HP directors to win a
majority, not a plurality, of shareholder votes to be re-elected to the
board. Some companies have changed their policies after directors were
re-elected with a large percentage of voters withholding their votes
for certain candidates. Dunn said HP requires directors who receive
more “withheld” votes than actual votes in their favor to submit their
resignation, and the proposal was defeated.
In other business, HP
reapproved its slate of directors, recertified Ernst & Young as its
accounting firm, and approved an executive compensation plan that could
allow new CEO Mark Hurd to earn as much as $9.2 million in 2006.
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