HP Chief Executive Mark Hurd Resigns ‘Effective Immediately’ Amid Sex Scandal
August 6, 2010
(ChattahBox)—Mark V. Hurd, Hewlett-Packard’s job-cutting and penny-pinching CEO, President and Chairman, credited with turning the computer maker around to lead the PC market, resigned on Friday “effective immediately,” amid an internal investigation of sexual harassment. The news was dumped via a company press release late in the day on Friday. The investigation was launched, after a former HP contractor lodged a sexual harassment claim against Hurd and HP through outside counsel on June 29. HP’s probe found Hurd had a personal relationship with the unnamed contractor, which culminated in inappropriate payments made to the contractor. The payments were discovered on Hurd’s fudged expense reports. Hurd’s conduct was found not to violate the company’s sexual-harassment policy, but it certainly did trample on HP’s standards of business conduct.
According to the company’s carefully parsed press release, Hurd’s actions didn’t rise to the level of sexual harassment internally, but the contractor’s attorney apparently thought there existed possible grounds for a civil case.
“Hurd’s decision was made following an investigation by outside legal counsel and the General Counsel’s Office, overseen by the Board, of the facts and circumstances surrounding a claim of sexual harassment against Hurd and HP by a former contractor to HP. The investigation determined there was no violation of HP’s sexual harassment policy, but did find violations of HP’s Standards of Business Conduct,” read the statement.
HP was also quick to point out that Hurd’s resignation was not related to the company’s performance.
“Robert Ryan, lead independent director of the Board, said: “The board deliberated extensively on this matter. It recognizes the considerable value that Mark has contributed to HP over the past five years in establishing us as a leader in the industry. He has worked tirelessly to improve the value of HP, and we greatly appreciate his efforts. He is leaving this company in the hands of a very talented team of executives. This departure was not related in any way to the company’s operational performance or financial condition, both of which remain strong.”
Hurd’s statement spoke of a failure to live up to ethical standards, acknowledging the sexual scandal prevented him from continuing “as an effective leader.”
“Hurd said: “As the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career. After a number of discussions with members of the board, I will move aside and the board will search for new leadership. This is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time. I want to stress that this in no way reflects on the operating performance or financial integrity of HP.”
CFO Cathie Lesjak has been appointed as an interim CEO, but she is not interested in keeping the position permanently. A search committee made up of the board of directors will find a new executive to replace Hurd.
Photo Source: HP
(Update: Oh, boy. The New York Times is reporting that celebrity sex scandal lawyer, Gloria Allred is representing the female contractor lodging sexual harassment charges against Hurd:
“Gloria Allred, the celebrity lawyer who has agreed to represent the woman, said, “We want to make clear that there was no affair and no intimate sexual relationship between our client and Mr. Hurd.” She declined to make the woman available for an interview or to identify her.”
And regarding Hurd’s severance package: “Mr. Hurd is leaving with $12,224,693 in severance, according to a company filing with the Securities and Exchange Commission on Friday. H.P. also extended the deadline for Mr. Hurd to purchase up to 775,000 shares of H.P. common stock, which were vested as of Friday, and 330,117 performance-based stock units that will also vest.”