CEO resigns

HP CEO Mark Hurd steps down amid sexual harassment claims

August 6, 2010: 4:26 PM ET

CFO Cathie Lesjack named interim CEO

Source: HP

Big news coming out of HP (HPQ) before the weekend:  It appears that Mark Hurd, the CEO who engineered HP's comeback after Carly Fiorina's tumultuous tenure, has resigned.

In an internal email written to employees, new Interim CEO Cathie Lesjak said that the charges of sexual harassment by the outside contractor were unfounded.

The investigation did reveal, however, that Mark had engaged in other inappropriate conduct. Specifically, based on the facts that were gathered it was found that Mark had failed to disclose a close personal relationship he had with the contractor that constituted a conflict of interest, failed to maintain accurate expense reports, and misused company assets. Each of these constituted a violation of HP's Standards of Business Conduct (PDF), and together they demonstrated a profound lack of judgment that significantly undermined Mark's credibility and his ability to effectively lead HP.

Hurd, who also served as Chairman of the Board, served in the CEO role for five years, starting March 28, 2005.  HP's lead independent director, Robert Ryan, will take the chairman role. Hurd could receive up to a $53 million severance package. In 2009, Hurd made a total of $24,201,448 in salary, stock and bonuses.  In 2008, his compensation totalled $33,952,237.

Updated: According to Engadget, who listened in on the HP call:

The investigation began immediately."the contractor's attorney sent HP a letter, and the investigation began the next day." The claim was filed by a "marketing contractor who worked from fall of 2007 through the fall of 2009 -- she was never an HP employee."

Hurd submitted inaccurate expense reports to conceal his relationship with the contractor which violated HP's standards of business conduct. This happened numerous times and "HP paid the contractor's fees for services and her expenses, [but] there was a question about whether her services were actually provided." Interim CEO Cathie Lesjak said that although Mark Hurd was a "strong leader, at the end of the day, he didn't drive our initiatives -- it was the organization that supported Mark in driving those initiatives." Ouch

It is also interesting to note that Jon Rubinstein just jumped aboard the HP ship as CEO of recently purchased Palm and will likely be given at least a once-over for the new role.   We called Todd Bradley EVP, HP Personal Systems Group one of the smartest people in Tech. He'll likely also receive some internal consideration.  Both can be seen here last month at Fortune's Brainstorm Tech conference.

It took HP's board two months (February 10, 2005 to March 28, 2005) to name Hurd CEO after Fiorina resigned.

Here's a video of interim CEO Cathie Lesjak giving a talk at Cal Berkeley's Haas School of Business.

HP gave the following statement: More

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