Long-time HP shareholders have another reason to be irritated: The company's market value has been sliced in half since Mark Hurd stepped down as CEO in an August 2010 rift with HP's board. That downturn has wiped out about $45 billion in shareholder wealth.
HP, which is based in Palo Alto, Calif., is being haunted by the rotten performance of a trio of major acquisitions: technology consulting service EDS, device maker Palm and business software maker Autonomy. The most vexing of the bunch has been Autonomy, where HP alleges it uncovered financial chicanery that the company says drove up the acquisition price by at least $5 billion.
Autonomy's former CEO Mike Lynch, who was fired by Whitman last year, has vehemently denied HP's allegations. The claims are under investigation by the U.S. Justice Department and financial fraud authorities in the U.K., according to HP. At least 12 lawsuits revolving around the handling of the Autonomy deal have been filed against HP.
In an apparent attempt to incite HP's shareholders, Lynch urged them to use the meeting to ask Whitman and the rest of the HP's board detailed questions about the circumstances surrounding the Autonomy deal in an open letter distributed Wednesday. Among other things, Lynch's letter for the first time raised the possibility that HP may have approached U.K. regulators about how the company might be able to back out of the deal before the $10 billion acquisition closed in October 2011.
"This meeting provides a moment of accountability for HP's board of directors to all its stakeholders," Lynch wrote, adding that he refused to be turned into "a scapegoat for HP's own failings." Lynch wasn't at the meeting.
No one in the crowd of about 200 people at Wednesday's meeting confronted Whitman about the Autonomy deal or other acquisitions. Several shareholders groused about how much HP's stock has fallen in recent years.
Beyond its troubled acquisitions, most of HP's other woes stem from a decline in PC sales as more technology spending shifts to smartphones and tablet computers. The upheaval has caused HP's revenue to fall from the previous year in six consecutive quarters. Whitman has repeatedly warned the slump may persist through the rest of this year. To offset the drop-off in PC sales, Whitman has cut about 15,300 jobs in the past year and is still planning to eliminate about 14,000 more positions.
In the meantime, HP is expanding its lineup of tablet computers and intensifying its focus on other technology fields, such as business software and data analytics, that are more profitable than selling PCs.