Ralph Whitworth, the activist investor HP drafted to join its board of directors as part of CEO Meg Whitman’s turnaround effort and who ultimately became its chairman, has resigned, the company said.
The reason was an undisclosed health problem. Whitworth is also the head of Relational Investors, which announced he is taking a leave of absence. David Faber of CNBC reported, and Re/code has independently confirmed, that Whitworth has suffered a recurrence of the throat cancer for which he was treated earlier this year.
Sources familiar with the matter say the news on Whitworth’s health was very sudden, only coming to light in the past few days. HP said it will begin the process of naming a new chairman at its next board meeting. The board has a regularly scheduled meeting this week. Sources familiar with the company’s thinking tell me not to expect HP to name a new director this week, but that the process will begin.
Whitworth joined HP’s board in November of 2011 after Relational invested in the company. As part of the deal, HP prevented Whitworth from seeking a significant change in the company’s operations for two years. During that time, Whitworth had more personal skin in the game than anyone else on HP’s board.
Relational owned about two percent of HP’s shares during a period when they were losing value. Relational has since sold some of its position, but still owns about 1.5 percent of HP’s outstanding shares, a stake worth about $6.2 billion, according to SEC filings dated March 31.
He accepted the chairmanship initially on an interim basis last year after Ray Lane resigned that position following a revolt by HP shareholders. The assignment became permanent as Whitworth came to believe in Whitman’s long-term turnaround plan.
Here’s HP’s statement on all this.
Ralph Whitworth Resigns from HP’s Board of Directors to Focus on Personal Health Concerns
PALO ALTO, Calif., July 15, 2014 — HP today announced that Ralph Whitworth has resigned from HP’s board of directors to focus on his health, effective July 16, 2014. Mr. Whitworth is also taking a leave of absence from his investment company, Relational Investors.
The HP board of directors will discuss appointing a new chairman at its next board meeting.
Whitworth, who was appointed chairman on an interim basis in April 2013, has been a member of the HP board of directors since 2011. He is co-founder and principal of Relational Investors LLC, a registered investment advisor founded in 1996.
“Ralph has been a friend and close advisor to me, the HP leadership team and every member of the board for nearly three years,” said Meg Whitman, president and chief executive officer, HP. “He has been a wonderful contributor to our efforts to turn HP around. Ralph’s passion and incredible mind for business will be deeply missed by all of us. We wish Ralph and his family the very best.”
“HP has made enormous progress reconstituting its board, implementing world-class capital allocation and corporate governance practices, and putting the company back on strong financial footing,” said Whitworth. “HP’s shareholders can be very confident that Meg, her team and the current board will stick to the strong practices and discipline we’ve put in place. While I’m disappointed to step down from HP’s board at such an exciting time for the company, it gives me great comfort that HP is in such talented and steady hands.”