Hewlett-Packard, a multinational information technology corporation has recently announced that CEO Mark Hurd had resigned amidst ongoing allegations about a sexual harassment case filed against him. HP officials previously stated that Hurd falsified expense reports and other documents to conceal a close-personal relationship with a former HP contractor.
However, the investigation concluded that there was no violation of HP’s sexual harassment policy; however Hurd’s actions violated the “Standards of Business Conduct”. Submitting falsified financial reports to hide a relationship convinced the board to replace Hurd. They said that Hurd had demonstrated a profound lack of judgment that seriously damaged his credibility and effectiveness as a leader. They also said that the decision to permanently replace Hurd was unanimous.
Hurd acknowledged that there were instances that he did not live up to the standards and principles of trust, respect and integrity that he have promoted at HP. Hurd will be given a hefty compensation amounting to $12.2 million for severance payment and nearly 350,000 shares of HP stock worth $16 million.
Gloria Allred, a high profile attorney from Los Angeles is representing the woman who made the sexual harassment claim. She said that there was no affair and no intimate sexual relationship between Hurd and her client; she also declined to identify the woman or to comment further about the case. A source close to the case told the press that the woman worked as a host for more than a dozen events from 2007 to 2009 which Hurd attended. The person also revealed that the disputed expenses range from $1,000 to $20,000 each for travel, lodging and meals.
Cathie Lesjak, the company’s chief financial officer was named interim CEO. She worked for the company for 24 years but she refuse to take the position permanently. HP has set up a search committee to look for a permanent replacement.
Hurd was considered as HP’s savior, an outsider who rescued the company from the mess left by his predecessor, Carly Fiorina. He has transformed the company from a computer and printer maker, into a company that playing a major role in technology services and other fast-growing areas like the IBM Corporation. Under Hurd’s leadership, HP’s stock price doubled, and its market value grew by more than $40 billion and HP has become the world’s No.1 technology company by revenue. After Hurd’s resignation HP’s shares tumbled, from $46.30 to $41.85 as investors reacted to the stunning news.
(image above for representation)
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