Corporate governance experts and others had urged HP to keep Hewlett on the
board even if the Compaq Computer deal was ultimately approved. Even some of
those who backed the deal, such as key adviser Institutional Shareholder
Services, had suggested that HP have Hewlett or another family member on the
board.

"I think we still feel that way, whether it was Walter or anyone else," ISS
Vice President Patrick McGurn said Monday. McGurn said he still hopes the
board will start a dialogue with both the Hewlett and Packard families.

<snip>

"At a minimum he represents 49.5 percent of shareholders and possibly more,"
said David Katz, chief investment officer of Matrix Asset Advisors, an early
opponent of the deal. Katz said the decision was unfortunate, especially
considering that boards are under pressure to nominate more independent
thinkers in the wake of the Enron scandal.

"It's disappointing although not surprising," Katz said. "In an age where
people are hoping to have (more) independent directors, this sort of flies
in the face of that."

Charles Elson, director of the University of Delaware's Center for Corporate
Governance, was among those who had encouraged HP to renominate Hewlett. He,
too, described his reaction as disappointed but not surprised.

"Half the shareholders agree with Walter," Elson said Monday. "Basically,
you are shutting yourself off to that viewpoint."

The decision to oust Hewlett could come back to haunt the company if the
deal is approved but the integration falters.

"At this point they certainly don't have the mandate most boards would like
going into an integration," Elson said. "Turning him out only compounds
their problems."

Said one HP worker who opposes the deal: "It has been Carly's style to get
rid of those who disagree with her direction. Walter was our only saving
grace."


Full article at:

http://zdnet.com.com/2100-11-872842.html

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