PALO ALTO -- Under heavy fire from investors over several recent multibillion-dollar bungles and other corporate missteps, Hewlett-Packard (HPQ) on Thursday said board Chairman Ray Lane will immediately give up his post, and two other directors will resign in May.

The shake-up, the second in two years, may ease the way for CEO Meg Whitman to revitalize the venerable Palo Alto corporation, which has been debilitated by turmoil in its executive ranks, overreliance on the dwindling personal computer business and a widely perceived lack of direction that's often been blamed on the board. It was clearly aimed at erasing investor angst and was cheered by some of the company's staunchest critics.

Hewlett Packard executive chairman and Kleiner Perkins managing partner Ray Lane poses at his home in Atherton in this Nov. 11, 2011, file photo.
Hewlett Packard executive chairman and Kleiner Perkins managing partner Ray Lane poses at his home in Atherton in this Nov. 11, 2011, file photo. Hewlett-Packard Chairman Ray Lane, who has come under fire from shareholders for his role in the botched, costly acquisition of British software firm Autonomy Plc, has stepped down, the company said April 4, 2013. (Robert Galbraith/Reuters file)

"We have been clamoring for massive changes at the board of HP," said analysts with investment bank Needham & Co., in a note to their clients. "While we continue to believe that HP's fundamental, strategic issues are vast, complicated and require years to change, we do believe that this is probably the first positive piece of news out of HP since Meg Whitman's arrival."

Lane, unsuccessfully targeted for ouster at the company's annual stockholder meeting last month, will remain as a director and be replaced on an interim basis as chairman by Ralph Whitworth, an HP director since 2011. Two other much-criticized directors on the 11-member board -- John Hammergren and G. Kennedy Thompson -- will resign at a board meeting in May, although the company gave no specific date for that.


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Hammergren and Thompson were targeted for ouster in large part because they are the board's longest serving members and were involved in some of HP's highly controversial purchases.

During the stockholder meeting, Hammergren received just 54 percent of the vote to retain his seat, Thompson survived with 55 percent and Lane had 59 percent.

"After reflecting on the stockholder vote last month, I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnaround," Lane said in a statement. "Since I joined HP's board a little over two years ago, I've been committed to board evolution to ensure our turnaround and future success. I'm proud of the board we've built and the progress we've made to date in restoring the company."

Whitworth is an activist hedge-fund manager and principal with Relational Investors, which owns about $800 million worth of HP stock. He promised in a separate statement that "we will recruit a world-class chairman to take my place as soon as possible, and we also hope to recruit at least two other outstanding directors before the end of this year."

HP has incurred the wrath of many investors for its sluggish sales, slumping profit and sagging stock price over the past couple of years, although its shares have rebounded a bit this year. In addition, many investors have been deeply concerned that several of its multibillion-dollar corporate purchases have soured.

The biggest outrage has been over the $11 billion acquisition of British software company Autonomy in 2011. Some critics said Lane, as chairman, should have more closely vetted the deal. HP recently wrote off about $8.8 billion worth of Autonomy's value, saying it was misled about the company's worth. The tech giant also has taken fire for writing off $8 billion for its 2008 purchase of Electronic Data Systems and nearly $1 billion for its 2010 acquisition of Palm.

Whitman took over as CEO in 2011, after the Autonomy deal, and her efforts to turn around the company remain a work in progress. But she generally has won cheers from Wall Street for cutting expenses -- HP is laying off 29,000 employees -- and trying to refocus its business. Among other things, she plans to invest heavily in helping businesses operate on the Internet, ward off computer hackers and analyze vast amounts of information.

Among those seeking the board shake-up were the powerful California Public Employees' Retirement System, New York City's public pension funds, the CtW Investment Group, and the American Federation of State, County and Municipal Employees Pension Plan. Also favoring the ejection of some directors were the influential stockholder advisory firms Glass Lewis and Institutional Shareholder Services.

Lane, who has been HP's executive chairman since 2011, is managing partner of private equity firm Kleiner Perkins Caufield & Byers. Hammergren, an HP director since 2005, is chairman of health care company McKesson. Thompson, a director since 2006, is a principal with private equity firm Aquiline Capital Partners.

HP two years ago reshuffled its board with five new members after CEO Mark Hurd resigned over an unproved allegation about his relationship with a consultant. About two months later, the board replaced Hurd with Léo Apotheker, who orchestrated the deal to buy Autonomy. Whitman replaced Apotheker nine months later.

Contact Steve Johnson at 408-920-5043. Follow him at Twitter.com/steveatmercnews.