HP Chief Executive Hurd Resigns After … You Guessed it Sexual Harassment Probe

mark hurd resigns

On Friday last week Hewlett-Packard (HP) Co.’s Mark Hurd resigned as chief executive officer (CEO) amidst the accusations of sexual harassment investigation. The claims against Hurd and HP are from a former marketing contractor. Hurd met with the rest of the Board of Directors and they decided that he should resign based on the allegations. HP claims that although there were no violations against its sexual harassment policy, Hurd violated the company’s standards of business conduct by submitting inaccurate expense reports that covered his relationship with the contractor. Here is a curve ball you weren’t expecting from the allegations though: The contractor, who was later revealed as Jodi Fisher, didn’t have an affair or a sexual relationship with Hurd, according to Gloria Allred, her attorney.

As I sit here on my HP laptop and hear nothing more than the repeatable sounds of keystrokes being pounded out, I still haven’t quite grasped this story. If only I could talk to Hurd….
So Mark, you were paying for a girlfriend, however there wasn’t any physical nature to your transgression? Spending company money (to the tune of $1,000-$20,000 per transaction over two years, including meals and travel, said a person familiar with the situation) to get into the candy shop, and then not buying anything? Someone like Harry Stonecipher (former CEO of Boeing Co., ousted for having a sexual affair with an employee) can at least base a dumb decision on something innate: male desire for female. But what turned you away from your wife, kids and plush job? Was it her ability to whisper in your ear the words fixed-sum-per-unit-method?

The departure leaves Hewlett-Packard, the world’s biggest maker of personal computers and printers, in search of a new CEO and chairman. Under Hurd the company regained leadership in the PC market from Dell Inc. and used acquisition after acquisition to expand into new markets, such as computer services. CFO Cathie Lesjak will be taking over in the interim and HP has made it fully clear that she has no interest in doing so full-time. Hurd’s departure is going to sting HP because his 5-year reign as CEO lists some very noteworthy accomplishments:

2008 – $13.2 billion takeover of Electronic Data Systems Corp., a provider of computer services. Catapulting HP to No. 2 in the services market behind IBM
2010 – Acquired 3Com Corp. for $2.7 billon, beefing up their competition with Cisco Systems Inc. in networking equipment
2010 – Acquired Palm for $1.2 billion, smart-phone maker that was pennies on the dollar purchase
2005-2010 – a slew of software companies (notably Opsware for $1.6 billion) acquiring a vast and deep portfolio

His strategy was pretty simple: build a product portfolio.

If this story does anything, it proves that human idiocy is not dependent on financial worth. Here is the man’s paychecks the past two years: $30.3 million in 2009 and $42.4 million in 2008. However the discrepancy in consequences of one’s actions isn’t the night and day you feel morally obligated to assume. His severance you ask? $12.2 million in cash, $16 million in stock. So the real dilemma is brought to the attention of those watching from the sidelines. The conflict of right vs. wrong is a moral dilemma only. Never a financial dilemma. The moral compass cannot prevent or distract from anything financial. Severances are severances and those of higher compensation aren’t effected more severely. He resigned, and was paid his due compensation, the same as if John Smith resigned from Auto Repairs for Remote Controls Inc. (ARRC). Because he is a man of higher status in the monetary and business food-chain, does not wield him a stricter punishment.

The general consensus of American’s place athletes and big business individuals on a pedestal. They imaginably materialize them to be a different kind of person, thinking that because of money alone he or she would NEVER make the mistakes of normal, everyday humans. So when an athlete does something stupid in a club, or a business tycoon is caught with their pants down — it is somehow more repulsive than if you or I did the same thing. We think because they have millions upon millions of dollars, they would NEVER have made that mistake in their situation. What a doofus. But the simple fact remains: they are no less human than anyone else. They have urges, momentary lapses, desires — no matter the level of stupidity — the same as you.

I’ll leave you with a piece from our friends at Business Week:
“HP remains in an exceptionally strong position both financially and in the marketplace,” Lesjak said in a memo to employees. “It is essential, however, that we remain focused and continue to achieve — if not exceed — our operational and financial objectives.”

The former seems evident, but the latter remains to be seen. How negatively the news effects their bottom line has more to do with how quickly a successor is found and implemented, more-so than the news itself. I’m not running out to my trashcan and dumping my HP laptop in disgust, nor am I basing any future purchases on the poor choices of a former CEO of that company, whether sexual or non-sexual. His issues don’t effect MY bottom line. And right or wrong, that is the way of the world.

Porter Novelli & APCO Worldwide are believed to be two primary PR firms working with HP.

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