By Cydney Posner

Here's more on the ISS recommendation against the reelection of certain HP directors because they allowed the new CEO to be involved in the selection of new Board nominees (See the March 10, 2011 news brief). This article from Bloomberg (cited in Broc and Dave's Blog on The CorporateCounsel.net) expands on the nature of the ties between the CEO and the new appointees: "One director sits on a board in Europe with [HP CEO Leo] Apotheker, and at least three others have been customers of German software maker SAP AG, where Apotheker was CEO and worked for two decades. The ties could inhibit directors from acting objectively, ISS said." Allowing the CEO to participate on the selection committee "runs contrary to the Nominating and Governance Committee's Charter," according to ISS. The article notes that "ISS also recommended that shareholders vote against Apotheker's proposed pay package, valued by ISS at $47 million, given his role in appointing directors." The article states that proxy advisor Glass Lewis also recommended against one of the HP directors, but for different reasons: this director was faulted for his role in approving the severance package for the former HP CEO and for "failing to create a succession plan that ‘may have avoided last summer's high-profile and ultimately expensive CEO hunt.' "

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