Requesting Stockholders’ Right to Act By Written Consent
- The Board recommends a vote AGAINST this proposal
Stockholder Proposal – Right to Act by Written Consent
Resolved, Shareholders request that our board of directors undertake such steps may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable law.
Hundreds of major companies enable shareholder action by written consent. Taking action by written consent in lieu of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle.
Dozens of Fortune 500 companies provide for both shareholder rights – to act by written consent and to call a special meeting. Our higher 25% threshold for shareholders to call a special meeting is one more reason that we should have the right to act by written consent.
It is especially important to gain a shareholder right, such as written consent, to make up for our management abruptly taking away an important shareholder right – the right to an in-person annual meeting. For decades shareholders had a once-a-year opportunity to ask our $10 million CEO and directors questions in person. Now our directors can now casually flip their phones to mute during the annual shareholder meeting. Our management did not even give us the opportunity to vote on whether we wanted to give up this important right.
Our management is now free to run a make-believe meeting with Investor Relations devising softball questions in advance while tossing out serious questions. Then our $10 million CEO can simply read the scripted IR answers to a microphone – no opportunity for audience feedback.
The lack of an in-person annual meeting means that a board meeting can be scheduled months after the virtual meeting – by which time any serious issues raised by shareholders under these onerous conditions will be long forgotten by the directors. Plus a virtual meeting guarantees that there will be no media coverage for the benefit of shareholders.
A virtual meeting is a complacency plan for our directors and top management. Top management has no incentive to avoid making mistakes for 365-days of the year out of concern that there will be an in-person accounting at the annual meeting in front of shareholders and media. Shareholders can vote against the $10 million paycheck of a CEO who refuses to answer shareholder questions in-person.
Please vote to give us a shareholder right to help make up for our top management stripping away one of our important rights:
Statement in Opposition
The Board recommends a vote AGAINST this proposal because it believes that matters that are sufficiently important to require stockholder approval should be communicated in advance so that they can be considered and voted upon by all stockholders at a meeting. In the Board’s view, action that stockholders may vote upon at an annual or special meeting supports stockholders’ interests more than action by written consent. Stockholders may propose any proper matter for a vote at our annual meeting, and, in addition, stockholders holding 25% or more of HP’s outstanding common stock may call a special meeting of stockholders. This right provides stockholders with a meaningful ability to propose actions for stockholder consideration between annual meetings. Annual or special stockholders meetings offer important protections and advantage that are absent from the written consent process that include:
- all stockholders have the opportunity to openly express views on proposed actions and to participate in the meeting and the stockholder vote;
- the meeting and the stockholder vote occur in a transparent manner, at a date and time publicly announced in advance of the meeting;
- accurate and complete information about the proposed stockholder action is widely distributed in the proxy statement before the meeting, which promotes a well-informed discussion on the merits of the proposed action; and
- the Board is able to analyze and provide a recommendation with respect to actions proposed to be taken at a stockholder meeting.
By contrast, the written consent process is less transparent and less democratic. Adoption of the proposal would make it possible for the holders of a bare majority of HP’s outstanding common stock to take significant corporate action without any prior notice to the Company, the Board or other stockholders, and without giving all stockholders an opportunity to consider, discuss and vote on stockholder actions that may have important ramifications for both HP and its stockholders. This approach would effectively disenfranchise any stockholders who do not have, or are not given, the opportunity to participate in the written consent process. Moreover, our stockholders have previously rejected a similar proposal at the 2015 annual meeting of stockholders of what was then known as Hewlett-Packard Company.
The Board also believes that HP’s strong corporate governance processes and extensive stockholder engagement program make adoption of this proposal unnecessary. HP and the Board regularly engage with and solicit the feedback of stockholders. In addition to HP’s stockholder engagement program and the right of stockholders holding 25% or more of HP’s outstanding common stock to call a special meeting, HP has strong corporate governance practices and provides significant stockholder rights that enhance Board accountability, including:
- an independent Chairman;
- majority voting in uncontested director elections;
- no stockholder rights plan;
- no supermajority voting provisions;
- annual election of all directors with a resignation policy;
- a proxy access right; and
- an extensive stockholder engagement program that includes the ability of stockholders to communicate directly to the full Board or to individual directors.
The Board believes that adoption of this proposal is unnecessary because of HP’s commitment to good corporate governance, strong stockholder engagement program and the right available to stockholders to call a special meeting of stockholders. The Board further believes that the risk of abuse associated with the right to act by written consent, including bypassing procedural protections that offer transparency and advance notice, both of which are afforded with a stockholder meeting, make this proposal not in the best interest of all stockholders. Accordingly, the Board recommends that you vote AGAINST this proposal.
Approval of this stockholder proposal requires the affirmative vote of a majority of the shares of HP common stock present in person or represented by proxy and entitled to be voted on the proposal at the annual meeting.