Top Preforming CEO fired for lying on his Expense Report

What's this world coming to, when a CEO is held to the same standard as every other working schmuck?

The inner workings of Hewlett-Packard’s board of directors never seem to stay private. The latest twist in the resignation of HP chief executive Mark Hurd has been reported by the New York Times. It turns out the HP board relied heavily — and perhaps wrongly so — on the advice of a public relations specialist at APCO about how the company could best do damage control if the allegations of sexual harassment by a marketing contractor against Hurd came out in the open.

The upshot from the latest story is that there are people out there who believe that HP’s board jumped the gun and shot itself in the foot when it forced Hurd to resign over what might seem to be either the smallest of corporate transgressions or a pretext for getting rid of him. After five years at HP, Hurd had become a business hero for turning around the company and making it into a $115 billion juggernaut.

Should HP have fired Mark Hurd?
Yes 29% (71 votes)
No 71% (174 votes)
Total Votes: 245

San Jose Mercury News: HP board must be far more forthcoming
Once again, Hewlett-Packard's board of directors has a lot of explaining to do.

The story of CEO Mark Hurd's stunning departure following allegations of sexual harassment and expense-report fudging still has too many holes.

The board, which faced congressional hearings and criminal charges just four years ago in a boardroom spying scandal, must be far more transparent this time around if it hopes to avoid further damaging the company.

This isn't just about idle curiosity, although the tawdry nature of the charges does attract interest beyond Wall Street.

Shareholders -- and the thousands of Silicon Valley residents who depend on HP for their livelihood -- deserve to know precisely what happened so they can accurately evaluate the company's leadership, both during and after the Hurd era.
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On Wednesday, Wall Street Journal columnist James B. Stewart recommended that investors avoid HP stock, citing a lack of "confidence in the judgment of HP's board" largely stemming from its silence on Hurd's departure. HP shares have dropped about 12 percent since the story broke, compared with a 3.5 percent decline in the tech-heavy Nasdaq.

If the board does not explain its actions, shareholders have every reason to worry.


Read more: http://www.mercedsunstar.com/2010/08/13/1528267/san-jose-mercury-news-hp-board.html#ixzz0wTIODEDv

Hewlett-Packard's directors have been sued by a Massachusetts pension fund that alleges they violated their fiduciary duties in connection with the abrupt departure of chief executive Mark Hurd, causing the company's shares to fall.

The shareholder derivative lawsuit accused the directors of failing to properly disclose the existence of an internal probe into Hurd's activities, failing to "police insider trading" by company executives, and trying to give Hurd tens of millions of dollars of severance he did not deserve.

"HP lost significant credibility," according to the lawsuit by the Brockton Contributory Retirement System, filed Tuesday in the Superior Court of Santa Clara County, California.

And then, on Aug. 6 — poof! — he was gone, brought low by a sexual harassment scandal.

Or was he? In the press release, H.P. noted that while a claim of sexual harassment had been made, an investigation had cleared him of the charges. Instead, the company alluded vaguely to “violations of H.P.’s standards of business conduct.”

When pressed, H.P. said that Mr. Hurd had fudged some expense reports. (It also said that his relationship with the woman, a small-time H.P. contractor, was a conflict, even if no sex was involved.) On his way out the door, the board handed Mr. Hurd a severance package said to be worth between $40 million and $50 million, which would seem to undercut the notion that he had done something bad.

H.P. says its board should be applauded for not letting Mr. Hurd off the hook. But this is just after-the-fact spin. In fact, the directors should be called out for acting like the cowards they are. Mr. Hurd’s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didn’t trust and employees didn’t like.

The stand-up thing would have been to fire Mr. Hurd on the altogether legitimate grounds that the directors didn’t have faith in his leadership. But of course Wall Street would have had a conniption if the board had taken such a step. So instead, it ginned up a tabloid-ready scandal that only serves to bring shame, once again, on the H.P. board.

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Gee, do you think that maybe the board of directors is responsible for this? Or the massive cost cutting and low morale that Hurd initiated? hmmm

Then, what was the purpose of bring up your displeasure with their product. If you had problems with 2 of 4, why did you continue to buy? What period of time were the 4 computers purchased over

Oh, so you have changed your mind on Hurd. You agree with your daughter

Will you continue to back him to the hilt in this thread

The HP board and sacked CEO Mark Hurd are still bitching at each other in the press, this time in the form of a long Wall Street Journal article that runs through another full round of he-says, they-say.

Here's what's new:

* The board did not get to see all the evidence about whether sexual harassment occurred, because Mark Hurd settled the lawsuit privately before the board could grill his love-interest, Jodie Fisher about it. Thus, sexual harassment could have occurred, and many board members think it did. But without evidence, the board had no choice but to announce that Hurd did not appear to have violated HP's sexual harassment policy.

* Mark Hurd Googled Jodie Fisher's soft-core porn flicks and spent at least 10 minutes watching them. (So maybe it was one of THOSE kind of non-sexual relationships)

* Hurd's sudden settlement with Fisher startled and angered the board and contributed to the board's decision to immediately can him. Hurd disputes this, saying that, in fact, the board urged him to settle the case.

* The board unanimously voted to sack Hurd. THEN, to make him go quietly, they negotiated a huge severance package with him.

This last point should enrage HP shareholders, who now have to foot the bill for a $35+ million severance payment for a CEO who was fired (for reasons that many of them still don't understand).

When a senior executive is fired for cause, as the board clearly thinks Mark Hurd was, he or she is not normally entitled to any severance. The only reason to give such an employee severance is to avoid being sued for wrongful termination. And although it is certainly better for HP to put this matter behind it, if the board really believed it had cause to fire Hurd, one would think they would have enough confidence in this conclusion to weather whatever lawsuit Hurd might throw at them.

A possible bidding war over data storage company 3PAR (PAR.N) between Hewlett-Packard Co (HPQ.N) and Dell Inc (DELL.O) sent shares of HP 1.9 percent lower, which helped to drag tech stocks down.

"The market's worried HP may be overpaying for 3PAR," said Giri Cherukuri, head trader at OakBrook Investments LLC in Chicago.

The line of questioning is relevant because Hurd was a known stickler on price. HP looked at buying Sun Microsystems before Oracle (ORCL) did but passed because the deal looked too expensive. The filings suggest Hurd saw the strategic fit for 3Par but wasn't willing to pay up. So it's reasonable to ask if HP has lost its pricing discipline with Hurd out the door.

Reasonable to ask, perhaps, but not to expect a substantive answer. Investors are sour on HP at the moment, and they never like to be on the winning side of an expensive bidding war. 3Par won't make or break HP, which will have to wait for a new CEO to begin its dialogue again with Wall Street. The next shoe to drop on 3Par will come this week. Dell had three days beginning Monday to respond to HP's latest offer.