HP intends to name two new directors to replace Hammergren and Kennedy by the end of this year. Until then, HP will have nine directors on its board.
During last month's shareholder meeting, Lane's re-election as a director was backed by just 59 percent of the vote compared with 96 percent for Ralph Whitworth.
Hammergren's re-election was opposed by 46 percent of the votes while Thompson was rejected on 45 percent of the ballots.
CtW Investment Group, an HP shareholder at the forefront of the rebellion, applauded Thursday's fallout. "Shareholders stand ready to assist the board in bringing in effective, independent directors to help restore this icon of U.S. innovation,'' Dieter Waizenegget, CtW's executive director, said in a statement.
Shareholders had targeted Hammergren and Thompson for removal primarily because their roles on the board gave them oversight over HP's acquisition strategy. Most of the company's major deals in recent years have gone badly, saddling HP with losses of more than $17 billion since 2010.
The most vexing of the bunch has been Autonomy, a business software maker bought for $10 billion in 2011. Late last year, HP alleged it uncovered financial chicanery within Autonomy that the company says drove up the acquisition price by at least $5 billion.
Autonomy's former CEO Mike Lynch, who was fired from HP last year, has vehemently denied the 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.
Lane, a former Oracle Corp. executive turned venture capitalist, also has been blamed for the botched acquisitions. He also was closely aligned with former HP CEO Leo Apotheker, who was fired in more than 17 months ago. The Palo Alto, Calif. company is now being run by Meg Whitman, who is hoping to engineer a turnaround within the next two to three years.
"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, 66, said in a statement.
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. 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.
HP's woes have cut the company's market value in half in less than three years, wiping out $45 billion in shareholder wealth. The damage would be even worse, if HP's stock had not rebounded during the past two months on hopes that Whitman has the company headed in the right direction. The stock rose 39 cents to close at $22.30 Thursday before the board changes were disclosed.
