HP gets activist on board
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HP gets activist on board
Steve Chiotakis: Later today, computer hardware giant Hewlett-Packard will report its earnings. The company fired its CEO a couple months back, and hired former eBay chief Meg Whitman. Well, now it’s added an unorthodox member to its board.
And Marketplace’s Jennifer Collins reports the company’s new strategy seems to be: If you can’t beat ’em, let ’em join.
Jennifer Collins: Activist investors are like any activists: Outsiders. That’s why analyst Brian Marshall of ISI Group says it was a surprise when HP announced activist shareholder Ralph Whitworth is taking a seat on its board.
Brian Marshall: I’m sure Ralph aproached the board and said we can do it, we can do it that way.
Kind of like that line from “The A-Team.”
“A-Team” clip: Now, we can do this the hard way or the easy way.
The board picked the easy way. The company’s last three CEOs were fired or resigned in controversy.
Eric Talley: Many of us who teach in corporate law use HP as sort of a case study of board dysfunction.
U.C. Berkeley law professor Eric Talley says when Whitworth agreed to take a board seat, he also agreed to a board requirement that he not push for a sale, spinoff or merger.
Talley: By tying his hands with these restrictions, maybe you’ve sort of insulated yourself from that type of shareholder activism over the next two, three or four years.
Which is the kind honeymoon the company could use with its new CEO Meg Whitman.
I’m Jennifer Collins for Marketplace.
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