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August 8, 2010

HP CEO resigns under a sexual harassment cloud

Mark Hurd leaves HP in turmoil after allegations of improper behaviour and expenses falsifications

By Jason Stamper

Cloud computing may be the topic du jour in IT right now but it was a very different cloud that saw HP’s CEO Mark Hurd resign his post suddenly Friday, after an allegation of sexual harassment and falsifying expenses came to light.

The news comes five years after HP CEO Carly Fiorina was ejected by HP’s board when it decided she was not executing the strategy effectively, and four years after HP chairman Patricia Dunn resigned her post after the board admitted it had hired private investigators to tap journalists’ phones. Hurd was in the CEO role when that scandal broke.

HP said an internal investigation found "numerous instances" in which Hurd submitted inaccurate expense reports meant to conceal Hurd’s "close, personal relationship" with an independent contractor. The inquiry was launched after the unidentified contractor claimed she had been sexually harassed by Hurd.

Mark Hurd, HP's former CEO

The company’s general counsel, Michael Holston, said Hurd’s behaviour reflected a "profound lack of judgment" and violated HP’s standards of business conduct. He stressed, however, that the company found no evidence of sexual harassment.

Hurd, 53, said of his departure. "I realised 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."

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Hurd will receive a severance package of $12.2m, according to documents filed with the Securities and Exchange Commission.

Hurd’s resignation stunned Wall Street — after the announcement, HP’s stock plunged almost 10% in after-hours trading, shearing nearly $10bn off the company’s market value and reflecting the fact that Hurd had built an enviable reputation for getting HP back on track and turning it once again into the world’s biggest computer maker.

In the 2005-6 scandal, HP hired private investigators to track down the source of board-level leaks to the media. The detectives accessed phone records by impersonating their targets over the web and phone, according to HP statements.

 

 

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