HP CEO Mark Hurd Resigns for “Inappropriate Behavior”

I figure it’s germane enough for us because of HP’s purchase of EDS. And because it involves inappropriate behavior. Check out the note from Cathie Lesjak, the CFO who will do honors while a search for a new CEO is underway:

This is to advise you that Mark Hurd, Chairman and CEO of HP, has resigned from the company effective immediately. Mark’s resignation was submitted at the request of the company’s Board of Directors as a result of inappropriate behavior in which he engaged that violated HP’s Standards of Business Conduct and undermined his ability to continue to lead the company.

At the request of the Board I have agreed to serve as interim CEO until a new, permanent CEO is hired. During this time I also will continue to perform my duties as CFO. The Board has formed a committee to undertake a search for a new CEO, and candidates from inside the company as well as outside the company will be considered. I have informed the Board, however, that I do not wish to be considered for the role of permanent CEO, and I have removed myself from being a candidate for that position.

While this news is unexpected, HP remains in an exceptionally strong position both financially and in the marketplace. It is essential, however, that we remain focused and continue to achieve — if not exceed — our operational and financial objectives.

Because there is likely to be considerable media coverage of this announcement during the next few days, I wanted to be the first to share the facts with you.

Mark’s resignation followed an internal investigation into a claim of sexual harassment asserted against Mark and HP by a woman who is former contractor to HP. The investigation was conducted by outside counsel in conjunction with HP’s General Counsel’s office and was overseen by the Board. Based on the investigation it was determined that the former contractor’s claim of sexual harassment was not supported by the facts.

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, and together they demonstrated a profound lack of judgment that significantly undermined Mark’s credibility and his ability to effectively lead HP.

As we regularly remind all employees, each of us is expected to adhere strictly to the Standards of Business Conduct in all of our business dealings and relationships. This expectation applies with even greater force to HP’s CEO and other senior executives who, given their positions, must set the highest standard for professional and personal conduct. The investigation that was conducted revealed that Mark had failed to meet this standard.

We recognize that this change in leadership is unexpected news. We also know that HP’s success in recent years is due to the collective efforts and hard work of more than 300,000 talented employees who have formulated far-reaching strategies and achieved our objectives better than anyone else in the industry.

On Monday morning we will conduct an all-employee webcast to discuss this matter further and answer your questions.

In closing, I would like to thank each of you for your contributions to HP, and to ask that in the weeks and months to come we do everything to ensure that HP’s future, like its past, is one of innovation, operational excellence, and the delivery of world-class products and services.

All the best.

12 comments on “HP CEO Mark Hurd Resigns for “Inappropriate Behavior”

  1. And since he was a U.S. corporate executive, he’ll surely walk away with a $100 million severance. Oh yeah, and his head hanging in shame.

  2. Nothing to see here folks, move along. This type of behavior can be observed within most boardrooms I’m afraid. Let’s stop paying Upper Management 100 times+ more than rank and file and then maybe their position won’t go to their heads.

  3. The EDS curse….

    1980s: GM buys EDS and changes it from from a nimble, dynamic environment to a fat, bloated bureaucracy

    1990s: Dick Brown oversells and under delivers. Lies, and bad “mega deals” almost kill the company.

    2000s: CEO Ron “Rottenmeyer” and Feld Group cronies undo the good of Michael Jordan’s first 3 years. No re-investment and slow to offshore business. They hire their sons and sons-in-law for jr. executive positions, one of whom often proclaims, “I’m a CEO in training,” and attends B-school at a Big Ten school on the company time and dime.

    2010 Mark Hurd’s dum-dum actions halt all the good he was doing to dismantle EDS’s bloated bureaucracy. I sure hope he was “getting younger at that position.”

  4. I’m running back to the office to do something highly inappropriate.

    Hopefully, I’ll get one of those golden-parachute thingamabobs, so all is good.

  5. HP lost $20 billion in market cap today because the CEO could not keep his toner cartridge out of the contractor inkwell.

    Hope she was hot.

  6. Oh dear. It’s the “2000s” that is delaying your approval isn’t it? It’s all true.

  7. Can’t hear you — the celebration here in Plano is deafening! Neighborhoods of people who were laid off from HP are alive with fireworks, drinking, 1 finger salutes, and dancing in the streets. Unfortunately, their houses are still in foreclosure, self-esteem remains in the toilet, and 401Ks were raided for living expenses.

    Those who are still working at HP are rejoicing in Hurd’s departure (the bars are busy tonight!), but extremely skeptical of any change due to the toxic corporate culture.

  8. @Bill: Solid. WSJ tells us today that Hurd will walk away with about $12 MM cash. Other stock and bonus could bring that total to $40 MM. The board should be ashamed. And I hope Hurd’s wife takes him to the cleaners.

  9. Here’s what’s crazy: he got tripped up on “no more than $20,000″ in fraudulent expense reimbursements he turned in. You would think with the dough he was earning he could spring for his own assignations. But no, he had to chisel the company to pay for his folly. The overweening sense of entitlement is absolutely monumental.