Hewlett-Packard, the country’s best-selling computer brand and the world’s largest technology company, is without a leader today. According to the Associated Press, CEO Mark Hurd was forced to resign this week after being accused of falsifying “expenses to hide numerous private dinners with a woman who was paid up to $5,000 per event to greet people and make introductions among executives attending HP events that she helped organize.”
The woman in question had accused Hurd of sexual harassment. However, both Hurd and the woman’s lawyer, Gloria Allred, claimed the relationship between the two was not sexual. The board of directions said that even though Hurd didn’t actually violate its sexual harassment policy, he did break its rules of conduct. Despite the accusations from HP’s board of directors, Hurd insists the money spent to pay the woman was a legitimate business expense, but he also says he doesn’t have a record of just how much was spent.
After the news was released on Friday, HP’s stock fell 10% in after-hours trading. Despite the loss, analysts say the drop was merely a reaction to the news and nothing to be concerned about.
Hurd began at HP in 2005 after 25 years at NRC Corp. With Hurd at the wheel HP spent over $20 billion on acquisitions that helped turn the company into a well-rounded computer company. The most recent was the $1.4 billion purchase of smartphone maker Palm Inc. in June. During his tenure, the company’s market value nearly doubled.
So, who will replace Hurd? No one knows for sure just yet, but there are rumors swirling that it could be an internal candidate. Some of the potential replacements from inside the company include Todd Bradley, who oversees personal computers and mobile devices; Vyomesh Joshi, who oversees printers; Ann Livermore, who leads the servers, services, software, and storage division; and Shane Robison, HP’s leader of corporate strategy and marketing. Cathie Lesjak, the company’s CFO, is serving as interim CEO until a replacement is named, but she insists she would not take the permanent job.
Don’t feel sorry for Hurd though. He will walk away with about $28 million in cash and stock.
As for HP, this is the third “scandal” to hit the company’s top executives in five years. Former CEO Carly Fiorina was forced to resign after the company’s controversial deal to buy Compaq in 2002 didn’t produce the desired results. In 2006 Chairwoman Patricia Dunn was forced to leave after a boardroom spying scandal involving spying on reporters’ and directors’ phone records which were being leaked to the media.