HP Stock Option Expensing Is Backed
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Shareholders at Hewlett-Packard Co. voted Wednesday to approve the expensing of stock options in a setback for Chief Executive and Chairwoman Carly Fiorina.
A nonbinding proposal from the Massachusetts Laborers’ Pension Fund was approved by 1.21 billion shares, with 925 million against, according to a webcast of the annual shareholder meeting in Houston. The board of directors of the Palo Alto-based company had opposed the measure and will now study the issue, Fiorina said.
Fiorina told shareholders that expensing options put the company at a disadvantage when comparing its results to rivals’. The Laborers fund said that not expensing options understated the cost of executive compensation and encouraged management to foster short-term price appreciation rather than long-term goals.
Hewlett-Packard shareholders also reelected all nine members of the computer maker’s board of directors, flouting a recommendation by the nation’s largest public pension fund.
The California Public Employees’ Retirement System last week urged shareholders to withhold votes from five board members who approved Ernst & Young as HP’s auditor and tax advisor. CalPERS said the consulting giant should avoid non-auditing relationships with HP.
But shareholders sided with Fiorina, who said those board members had provided “excellent” advice to senior executives.
HP shares rose 33 cents to $22.12 on the New York Stock Exchange.