HP Shareholders Back Hurdle for ‘Poison Pill’

Hewlett-Packard Co.’s shareholders, in a rebuff of management, Wednesday backed a requirement for a shareholder vote before HP’s board could adopt a “poison pill” anti-takeover measure.

Carly Fiorina, HP’s chief executive, had argued that such a requirement would limit the flexibility of management to react quickly to hostile bids. Poison pills are designed to make a hostile takeover prohibitively expensive by giving existing stockholders the right to buy more shares at a discount in the event of change in ownership.

The nonbinding resolution passed with 1.2 billion shares voted in favor and 942 million against.

“The board will duly consider the recommendations in that proposal,” Fiorina said at the company’s annual meeting after requesting that the tally be read to her twice.

Another resolution opposed by management -- one calling for a shareholder vote on any executive severance package that is more than three times the executive’s salary and bonus -- was too close to call, Fiorina said.

Despite the close votes, the annual meeting was sedate compared with the contentious battle of just over a year ago to approve HP’s $19-billion merger with Compaq Computer Corp.

Fiorina said recent results indicate cost savings and profit targets announced before the merger have been met or exceeded well ahead of schedule.

“The fact is HP is no longer an integration story,” she said. “The integration is largely complete, and it is working. This is now an execution story and a leadership story. Our own experience is proof that this company can execute.”

In other votes, shareholders backed management, accepting its slate of directors and rejecting proposals to expense stock options and to set human rights standards for business in China.

HP shares rose 37 cents Wednesday to $15.99 on the New York Stock Exchange.