Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

Pursuant to these definitive additional materials, ISS recently changed course and recommended a vote for HP’s say-on-pay this year. HP apparently obtained ISS’ change in recommendation by the addition of a total shareholder return (“TSR”) metric to the performance metrics applicable to fiscal 2013 awards to HP Section 16 officers.


HP’s problems are not over however, because ISS is apparently recommending a vote against three directors.  HP filed these additional materials arguing HP is making progress in executing on its strategy and improving on its financial performance and changing the composition of the HP Board of Directors could be destabilizing to the company.

ISS is what it is, and you can think what you think, but maybe HP’s real problem is its investors are ticked off.  New York City Comptroller John C. Liu filed this notice of exempt solicitation announcing that  the New York City Pension Funds will vote against two Hewlett-Packard  directors “because of their failure to protect investors from costly, misguided acquisitions.”  According to Mr. Liu “The Autonomy debacle is the latest and most expensive in a series of ill-advised acquisitions and boardroom fiascos that have destroyed tens of billions of dollars in shareowner value.”

Mr. Liu’s tactic demonstrates the power a major shareholder can easily wield by filing a little known notice of exempt solicitation pursuant to Rule 14a-6(g) on an EDGAR form unnaturally named PX14A6G.  Personally, I like the EDGAR moniker IRANNOTICE better, because I know what I am going to see when I click on it.

The above, however, is not a complete statement of HP’s adventures this proxy season.  After mailing its proxy, HP had to correct it to clarify that the share limits in its proposed  plan apply to all awards made under the plan, not just awards intended to satisfy the “performance based compensation” exception to the deductibility limitation set forth in Section 162(m) of United States Internal Revenue Code of 1986.  It’s easier said than done, but a lesson to draft carefully the first time.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.