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HP CEO resigns suddenly after sexual harassment claims [U2]

updated 04:40 pm EDT, Fri August 6, 2010

HP CEO makes surprise exit after accusations

(Update with compensation) HP faced a shock upheaval on Friday as it revealed that its CEO Mark Hurd was resigning all his positions immediately following accusations of sexual harassment. The decision followed after both HP's general counsel and an outside legal team found that he had violated the PC builder's standards of conduct, although he wasn't found to have engaged in harassment. Hurd didn't directly admit any claims but acknowledged he "did not live up to the standards" of the company.

Chief financial officer Cathie Lesjak is stepping in as temporary CEO until a committee created by the Board of Directors, including Netscape co-creator Marc Andreessen, finds a permanent replacement. Committee member Robert Ryan stressed that the sudden exit wasn't triggered by any financial issues at the company, which is still profitable and is continuing to gain computer market share.

The company believes it will remain stable after Hurd's exit, but the move is a symbolic blow to a company that is in the middle of a significant transition in the home towards mobile. It has publicly confirmed a plan to use Palm's webOS for virtually all of its mobile products, including printers, and has relegated its Windows 7 tablet to the niche enterprise market in favor of a more mainstream webOS device.

HP has had a problematic history in the past decade after criticisms of former CEO Carly Fiorina allegedly hurting company performance and more recently a spying scandal accusing executives of abusing authority in attempting to track leaks.

Update: During an emergency call to discuss the results, HP revealed that a contractor hired for marketing had made the accusations. She reportedly had a "close, personal relationship" with Hurd, who allegedly had numerous personal expenses relating to her reimbursed as company expenses. The former CEO also took steps to conceal the relationship.

The Board of Directors launched an investigation "immediately" afterwards and decided that Hurd couldn't be an effective leader after word of the sexual misconduct became clear.

Update 2: Both an SEC filing and leaks point to Hurd having received between $40 million and $50 million in return for opting out of any legal action against HP. About $12.22 million of the compensation is severance payment, while the remainder includes extending an option to buy 775,000 shares until September.



By Electronista Staff
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Comments

  1. martinX

    Fresh-Faced Recruit

    Joined: Sep 2008

    -3

    Spreadin' the love.

    So what. He was trying to do to her what he's been doing to HP's shareholders for years.

  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999

    +3

    Not harassment!

    Er...it's not harassment if they had a "close personal relationship". That's known as consent. I wonder who set him up?

  1. MisterMe

    Fresh-Faced Recruit

    Joined: May 2007

    +6

    Not harassment? Doesn't matter!

    If you pay for your mistress using company money, then you can expect to lose your job. That is what Hurd is alleged to have done. He must now pay for his poor judgment.

  1. macnixer

    Fresh-Faced Recruit

    Joined: Mar 2006

    +3

    $50 million when fired?

    I would love his job. One, I have a personal relationship and two, get $50 m. Whoa.

    @MisterMe, I am sure you posted before the compensation was announced. Don't worry. This person is not hurding anyone. He just was being nice and HP is making sure that he can leave with a load of money.

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +7

    Why do pricks like this always

    get a free pass in life. Poor job performance, get a bonus. Fire thousands of employees, get a bonus. Harass an employee, leave the company, get a huge golden parachute. Life is not fair at all.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +2

    Re: Not harassment? Doesn't matter!

    If you pay for your mistress using company money, then you can expect to lose your job. That is what Hurd is alleged to have done. He must now pay for his poor judgment.

    Actually, it does matter. They are two completely different sets of rules being broken.

    And what I can't fathom is if they had proof of misdeeds, why don't they ever fire these a******* instead of letting them walk with millions in their pockets? They give him his money so he won't sue them? And you know he would, because the company wouldn't want the publicity and he'd know they'd settle before going to trial.

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