HP CEO Resigns Following Revelation Of Inappropriate Relationship

After five years as CEO of the world’s largest maker of personal computers and printers, Hewlett-Packard CEO Mark “That’s What I” Hurd stepped down from his post on Friday after the company discovered he’d been intimately involved with a former contractor… and falsified documents to cover it up.

Several weeks ago, the contractor — who is described as working on “marketing matters” — accused Hurd and the company of sexual harassment. HP says their investigation found that Hurd didn’t violate the company’s sexual harassment policies, but he did falsify expense reports and other documents to both conceal the relationship and to get the contractor paid for work she didn’t do.

Afterward, Hurd confessed 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.”

Hurd didn’t leave empty-handed; he’ll receive a $12.2 million severance payment.

Even though HP’s stock had doubled during Hurd’s tenure, the company’s general counsel made it quite clear in a conference call that “it would be impossible for him to be an effective leader moving forward and that he had to step down… The facts that drove the decision for the company had to with integrity, had to do with credibility, had to do with honesty.”

The company’s chief financial officer, Cathie Lesjak was named interim CEO.

HP CEO abruptly resigns amid harassment claims [AP]

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  1. Forty2 says:

    Well at least he didn’t get the $40 million payout that Carly Crazypants got after she was fired, but still, severance in this case should be zero.

    • Jonbo298 says:

      Actually, hate to burst your bubble but he likely will get at least that much. From CNBC:

      Hurd will be well compensated as he departs HP. An SEC filing examined by CNBC indicated that Hurd is contractually entitled to $52.9 million in the event of a resignation.

      The filing, dated 2009, says that total is composed of $11.6 million in cash, with the remainder in stock options and restricted stock.

      A source close to Hurd put his current severance at about $40 million.

      http://www.cnbc.com/id/38597921

  2. koalabare says:

    What was she described as working on?

  3. Wireless Joe says:

    Actually, $10-12 million’s just the cash payout. With stock options, it’s closer to $40-50 million.

  4. Extended-Warranty says:

    It’s easy to fault him, but it’s hard to be tempted like that. This is unfortunate for shareholders who have been kept happy under him, but have no choice.

    • herbie says:

      Uh, we should feel bad for him? No. I don’t think so.

      • Extended-Warranty says:

        Of course he’s the “big evil CEO” that we all love to hate. The guy brought great prosperity to HP and he made a dumb mistake because he thought he was in love. I don’t think we should all reflect on his career, but still, he’s only human.

        • FrankReality says:

          I don’t feel sorry for him one bit. I do feel badly for the 15,200 employees who lost their jobs and the customers who suffer from quality problems because of his ruthless cost-cutting.

        • herbie says:

          I don’t care that he’s a CEO. I care that he’s a cheater.

          • SpruceStreetPhil - in a new Pine flavor says:

            Do you hold HP stock? If not, no one cares. If so, how does this affair reflect upon his ability to lead a company fairly well as he has been doing?

            • JMILLER says:

              It reflects that if the CEO can FALSIFY expense reports, and still have a job, it means every other employee MUST be granted that same “right”. Let’s call falsifying an expense report what it really is, THEFT. He stole money. His reasoning is not relevant. If it was not a big deal, he could have just said, I am sleeping with her, its not your business, next issue.
              He should not be fired for fucking a contractor. I also think the board is absolutely foolish to honor any stock or cash buyouts. I am sure the board has plenty of clauses in the contract that allows for firing with cause and no compensation. If they do not, than every board member who allowed his contract should be immediately be investigated for not doing their ONE role.

        • PSUSkier says:

          I just don’t like him because he was a douche-bag. As someone who has owned a few crappy HP products that failed prematurely (think batteries) and someone who knows a few people who work for the company (he was ruthless and very aggressive — good for stockholders but bad for your average human) I feel he deserves every bit of negative sentiment that gets thrown at him.

        • Megalomania says:

          No, he committed fraud, which means he is now forcing the company to abruptly change CEOs which will impact their long term goals and give their stock a hit in the immediate future. “I did it for love” is not an excuse for defrauding your own company, and if someone lower in the company pulled that shit they wouldn’t get a chance to resign cause they’d be out on their ass and arrested before they could think of having their writing team draft a memo.

          This guy had everything going for him, and he decided to commit fraud and nail some contractor. Why exactly should we not hate him?

  5. EarthAngel says:

    Maybe that’s what it takes to get repairs done…if only we could all have inappropriate relations with the CEO.

    http://consumerist.com/2010/08/hp-wont-repair-my-out-of-warranty-laptop—-do-i-fight-or-bail.html

  6. Primarylupine says:

    So that’s why he bought Palm.

  7. Griking says:

    What a fucked up world we live in where rather than getting arrested for falsifying documents he actually gets to resign with a 12.2 million dollar payout. The shareholders should sue.

    • Mr.Grieves says:

      Agreed.

      I wish I could participate in misconduct at my job, get fired for it, AND get a large payout.

    • bwcbwc says:

      Well, except that in order to deny severance, they would have to fire him for cause. They probably would have a good case for that,. but if they did fire him, the lawsuit would eat up just as much money and keep the story in the media for months. Once you factor in the trial costs, plus the media/reputation difference between a 3-day story and a recurring story that lasts over several months, the difference to the shareholders isn’t that big.

  8. Guppy06 says:

    “The facts that drove the decision for the company had to with integrity, had to do with credibility, had to do with honesty”

    I guess what HP is expected to show towards shareholders is completely different from what consumers should expect.

    And really, it’s not about integrity, credibility and honesty, it’s about getting caught.

  9. Malicious A says:

    i work for HP, and i have NEVER liked this guy nor the trainings they gave us. I should frame this article alongside one of the emails he sent requesting all employees to follow the guidelines in the HP SBC. whatta douchebag.

    • EarthAngel says:

      Does your retirement package look like his?

    • TheSpatulaOfLove says:

      Malicious, be ready for even MORE SBC web classes. We’ll be doing them weekly because of this.

      It seems like every time the execs get caught doing something, all the rank and file get to suffer with endless compliance training.

      • ken2148 says:

        Years ago I used to work at a division of Boeing. Every time there was some scandle we had to do so BS ethics training. During each training session we’d bitch how the execs would f-up and we got to do the training. The best was when the CEO who was pushing all this ethics training got caught sleeping with his underling and had to resigned. Think he needed the training more than us.

    • Dukebruno says:

      Since you work for HP you were (presumably) paid for the time that you sat there taking their dumb-ass training and it didn’t cost you anything out of pocket. Late last year HP told all resellers that they had to take mandatory training that explained why bribing public officials is a bad idea. Oh yeah, and we had to pay a $ 120 fee to take the training. We’re all waiting to find out how much it will cost us to take the new sexual harassment training because Hurd couldn’t keep it in his pants. In a bit of irony, the name of the outside company that developed the training (and got my $ 120) is called INTEGRITY INTERACTIVE.

  10. Mike says:

    I’m sorry but on behalf of everyone on here I have to say it: FUCK YOU!

    I know, it’s harsh. But seriously what is wrong with this world where a CEO bangs a contractor, lies about it, makes up false expense reports and for all his trouble he gets $12.2 MILLION DOLLARS for being a man-slut?

    Try telling that to my uncle who was laid off from HP two years ago and still hasn’t found a job. He didn’t do anything wrong. He didn’t sleep with someone and falsify company documents to hide it. All he did was show up to work everyday for 15 years and someone decided it was too expensive to keep him on the payroll so he was laid off. He got unemployment for 99 weeks and then nothing. This guy gets $12 million in cash and more than twice that in stock options. That is complete bullshit.

    It is stories like this we will look back on in history and shake our heads. This is ridiculous.

    • bhr says:

      He got that because he 1) had a contract, which most of us don’t as employees and 2) Made a shit ton of money for the stockholders, and they don’t want him walking around revealing corporate secrets and strategy.

      Sorry about your uncle, but he was a meaningless cog. This dude made a massive amount of money for the company, and is/was deeply involved in things that HP needs to keep from the competition.

      • Mike says:

        Oh you’re right my bad. He had a contract and made shareholders lots of money, so he totally deserves $12 million. What was I thinking?

      • outoftheblew says:

        I’m surprised that stealing from the company doesn’t invalidate his contract.

      • Primarylupine says:

        Trouble is, you need those “meaningless cogs” to run your money machine. I’d wager that the guy that empties the trash bins knows more about the company’s products than the CEO.

        America, the great place of failing upwards.

      • RandomHookup says:

        When I leave my current job, I can’t go around “revealing corporate secrets and strategy” and no one is paying me millions to keep my mouth shut.

      • Chumas says:

        Then perhaps we need to start taking these worthless CEO’s filled with company secrets to “retreats” up in the mountains and then “let them have an accident.” Say, with a chocolate bar and a grizzly.

        We need to revert to the age of the Industrialist, a person who wants his employees to succeed as much as the company, because when they succeed together, you sell more, they buy more and everyone makes a fistful of dollars.

        • bwcbwc says:

          You really need to learn your history. The whole union movement got started because industrialists have ALWAYS tried to screw over the workers and the shareholders.

      • JMILLER says:

        The contract would be null and void if it were found (and it has been) that he did things that are ILLEGAL to make that money. HE filed false expense reports, filed tax reports that are now false. He probably put out annual reports with his signature on them that are false. These are not minor offenses. In my opinion, he is worse than Ken Lay. At least Ken Lay was trying to save his failing company. This guy was only thinking with his dick and about himself.

  11. bananaboat says:

    With all the job cuts he forced AND reduction in pay…he’s paying a skank with company funds and falsifying expense reports. Typical CEO – PR person for the shareholders and screws the workers.

  12. failurate says:

    If you make tens of millions of dollars, why would you have to give company money to the person you are boinking… couldn’t he have just paid her himself?

    • PSUSkier says:

      plausible deniability? Perhaps in this way his wife couldn’t find random transactions that lead to his boinking some other chick. Either way, with the cutbacks and everything else he forced on the ranks of HP all I can think is Bwahahahahaha.

    • evnmorlo says:

      Direct payment for prostitution would be uncomfortable for both parties. The lady would feel forced and the gent would feel he needs to get his money’s worth. Getting HP to pay solves this dilemma for the most part.

    • pot_roast says:

      Except he wasn’t boinking her. Even Gloria Alred said that. She whipped up a sexual harassment complaint which was found to be unfounded, but while investigating, they found this other financial issue.

      (sf chronicle article had more information)

  13. hegemony says:

    This guy is my hero.

  14. Nisun says:

    and we wonder why HP computers all suck…… GO TO HELL HP!

    • Fafaflunkie Plays His World's Smallest Violin For You says:

      …and their printers, too. Hence the reason why I’ll never buy HP anything — seeing how many HP products need to be replaced at work because they magically die about a week after the warranty expires, and repairing them cost more than replacing them. Fuck HP, just like Hurd apparently did.

      • ShruggingGalt says:

        There’s a reason at my office I’m now bringing refurbed 8-10 year old HP printers back online – because back then they made them to last. And they are dirt cheap to buy (someone in town refurbs them) and operate (around 1/2 cent a page in toner costs).

        The new HPs? You’re right. Junk.

  15. DanRydell says:

    Lulz @ the class warfare.

  16. bluevoter says:

    Maybe this is Hurd’s way of supporting his predecessor, Her Worship La Fiorina. It takes the focus off her disastrous performance as HP CEO as we all talk about this scumbag and his $50M payday. Is there anyone else here who has been around long enough to remember when HP was one of America’s most admired companies, and actually invested in R&D, rather than just cutting costs to increase profits and sticking the HP logo on machines made in Asia.

  17. chris_d says:

    Which are you calling class warfare? The CEO screwing customers with sh*tty products and employees (with layoffs and pay cuts) while enriching himself, or customers employees getting pissed about it?

    Usually when someone uses the term “class warfare”, it’s the second one.

    HP’s quality has taken a nose-dive ever since that self-promoter Fiorina took over. It’s gotten worse under Hurd. We’ve had formatter board problems with a number of the newer printers (it’s an epidemic — Google it); the old ones never have problems. I e-mailed Hurd’s people; they did nothing.

    • evnmorlo says:

      He increased HP’s share price, which is all that matters.

    • David in Brasil says:

      I’m old enough to remember when HP products were something that engineers bought and showed off to their friends. I was PROUD to own my first HP scientific calculator. Before IBM commoditized the PC, HP’s PC operating system was top notch for scientific endeavor. Carly Fiona came along and ruined their reputation. Now if I had an HP computer, I’d cover the logo with electrical tape.

    • JMILLER says:

      The product quality does not matter in this case. He stole money from the company. Business expenses are tax deductible, and if Hurd signed off on SEC documents that were KNOWINGLY false, he should be in prison.

      I wouldn’t care if he sold the highest quality product known to man, or glass shard popcicles.

  18. Abradax says:

    Falsified expense records, basically stole from the company, and gets to leave with 12.2 million.

    If I falsified expense records and claimed personal expenses as business expenses, my company would fire me without severance, AND prosecute.

  19. jpdanzig says:

    Given their monumentally crappy products, I would say that the bar for “trust, respect and integrity” at HP has been set pretty low for some time now…

  20. working class Zer0 says:

    Afterward, Hurd confessed 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.”

    =

    Those principals are for the little people, they shouldn’t apply to me!

  21. LastError says:

    Well of COURSE he didn’t violate the company sexual harassment policy. The contractor wasn’t an employee, technically, so the HP policy wasn’t a factor. Mentioning that he didn’t break it is a red herring.

    It’s like saying he had nothing to do with the mess on LV-426. No, of course he didn’t. And a good thing too.

    So he gets to look under his chair and get the Oprah prize package.

    But I am going to take a different tack and ask how this inappropriate relationship harmed HP. Their stock price was way up, customers were buying more and more of their products, and overall the company’s profile was doing pretty well.

    If he was having a fling with a contractor, then it either didn’t seem to hurt anything OR it may have even inspired some of the success. Every warrior needs to feel like they are fighting for something. A corporate warrior would probably fight for his contractor fling by doing his best to be successful, which in turn boosts the company, which is what he, the company, and the shareholders want.

    And it’s not like the contractor cooed in his ear and convinced him to buy Palm or anything. Oh wait…

    • JMILLER says:

      The affair is not the issue in anyway. The issue is illegal contracts, illegal expense reports and falsified documents. See, even if HP did well, that money paid to his mistress and for his personal use are NOT things he can spend and have reimbursed. That is company money, which is not HIS, it is the shareholders. That money is TAXED. He knowingly signed false annual reports. Sarbanes Oakley made CEO’s responsible to make sure they were giving accurate reports. HE CLEARLY knew he filed one filled with lies.
      Your philosophy seems to be, even if he is a criminal, at least he made people money. So does the mafia. In fact, so did Bernie Madoff.

  22. Clyde Barrow says:

    “accused Hurd and the company of sexual harassment.”

    I wonder what he promised that he didn’t come through with? Something upset her so in the end, and as always, it becomes sexual harassment.

  23. PsiCop says:

    Re: “Hurd didn’t leave empty-handed; he’ll receive a $12.2 million severance payment.”

    That’s how it is for CEOs. They get rewarded for wrongdoing. If a rank-&-file employee had faked an expense report for one meal, s/he’d be summarily fired and blackballed for it.

    Way to go, board rooms of America. Keep it up.

  24. Caveat says:

    Well at least he finally got caught with his pants down. At his previous company he put a bimbo in charge of our organization which had big tits and a shapely figure but no brain. He obviously had not hired her for her brains. Guess who paid the price? 45% of our organization’s employees were laid off…

  25. bwcbwc says:

    Behind that innocent, boyish smile lurks a heart of eeeeeeeeevillllll!!!!!