HP CEO Mark Hurd steps down
PALO ALTO, CA (KGO) -- Hewlett-Packard CEO Mark Hurd is stepping down from the company after a sexual harassment allegation and an internal investigation that found he falsified expense reports.
HP lawyers say a marketing consultant hired by Hurd's office was either compensated or received expense reimbursements when there was no legitimate business activity.
Hurd's sudden departure as HP's CEO has stunned the business world.
"There is in the Silicon Valley something called 'the HP way;' HP always prided itself in having the highest ethical standards," University of San Francisco business professor Eugene Muscat said. "I think it can withstand this simply because it is being quickly dealt with."
Hurd joined HP in early 2005. He knew then he was taking the helm of Silicon Valley company with a rich and proud history.
HP isn't taking this matter lightly. The company issued a statement saying, "The Board investigation found that Mark demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP."
Hurd is out after submitting numerous questionable expense reports to apparently cover up a personal relationship with a contract employee now accusing Hurd of sexual harassment.
An internal investigation found Hurd did not violate a sexual harassment policy, but he did violate the company's rules of conduct. Hurd resigned after falsifying several expense reports to cover his relationship with his accuser and to pay her for work she didn't do.
"He's brought down by the lowliest of corporate offenses which is basically cheating on your expense account," said New York Times editor Damon Darlin.
"I just wish it could've set a better example for our company, especially for a CEO," said Roger Liu, a HP contractor.
Chuck House is not surprised. He worked at HP for 30 years and wrote the book published last year called "The HP Phenomenon."
House says Hurd's management style walked a fine line.
"Manage by fear, manage by ruthless, authorocratic style, it was take no prisoners, cost cutting was the entire gig," House said.
From a business standpoint, most analysts view Hurd as an extremely effective leader. During his five years, HP stock went up 113 percent.
The HP board has named Chief Financial Officer Cathie Lesjak as its interim CEO, but she says she is not in the running for the permanent position.
His accuser has since hired attorney Gloria Allred. She insists there was no affair and no intimate sexual relationship between her client and Hurd.
Hurd is married, 53 years old, and is receiving a sizable severance compensation package. Over the past three years, he has made over $100 million and is now walking away with a $12 million severance payment and another $16 million in stock options.
hewlett packard, business
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