Ever since the board of Hewlett-Packard sacked its vaunted CEO, Mark Hurd, the business world has been utterly mystified. Hurd stepped down 10 days ago following a sexual-harassment complaint filed by former skin-flick actress Jodie Fisher. Though the board dismissed those allegations, it accused Hurd of concealing his relationship with her and submitting fudged expense reports. Already, the board's handling of Hurd's ouster has spawned a shareholder lawsuit, a denunciation by Oracle CEO Larry Ellison and a severe plunge in H-P's stock (wiping out $9 billion in value).
For many shareholders, a gnawing question remains: if Hurd's offenses were inexcusable, why was he given a golden parachute worth an estimated $45 million? Getting us closer to an answer, the Wall Street Journal reports that Hurd was ousted because he wasn't cooperating with the company's internal investigation of the sexual-harassment claim. Sources inside the company say Hurd settled the harassment claim with Fisher to prevent the company from finding out any details:
"The effect [of the settlement] was to short-circuit the board's investigation and increase mistrust among directors who already felt Mr. Hurd hadn't been fully cooperating with the internal probe," the Journal reports. Does this get us closer to the truth?
- Yes: This Is Big News, writes John Furrier at Silicon Angle: "I can confirm from an source on my side that the Wall Street Journal story is accurate. This confirms that 'hush money' was paid by Mark Hurd to silence Jodie Fisher. More importantly it is the emergence of 'material proof' that Hurd was covering the relationship with Fisher up and that HP was using the expense report and just an excuse to get rid of Hurd."
- Not Really, writes Chris O'Brien at Silicon Beat: "While we don’t know exactly what Hurd did, it’s clear he did something. He had some kind of relationship with Jodie Fisher that went beyond professional but stopped short of sex. And whatever it is, he clearly shouldn’t have done it. He put himself in this pickle and has only himself to blame for that. And like the board, Hurd is also not explaining himself to the world, though most likely his separation agreements contains a non-disparagement clause of some kind."
- I'm With Hurd, writes Joe Nocera at The New York Times: "H.P. says its board should be applauded for not letting Mr. Hurd off the hook. But this is just after-the-fact spin. In fact, the directors should be called out for acting like the cowards they are. Mr. Hurd’s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didn’t trust and employees didn’t like. The stand-up thing would have been to fire Mr. Hurd on the altogether legitimate grounds that the directors didn’t have faith in his leadership. But of course Wall Street would have had a conniption if the board had taken such a step. So instead, it ginned up a tabloid-ready scandal that only serves to bring shame, once again, on the H.P. board."
- H-P Shareholders Should Be Enraged, writes Henry Blodget at Business Insider: "HP shareholders... now have to foot the bill for a $35+ million severance payment for a CEO who was fired (for reasons that many of them still don't understand). When a senior executive is fired for cause, as the board clearly thinks Mark Hurd was, he or she is not normally entitled to any severance. The only reason to give such an employee severance is to avoid being sued for wrongful termination. And although it is certainly better for HP to put this matter behind it, if the board really believed it had cause to fire Hurd, one would think they would have enough confidence in this conclusion to weather whatever lawsuit Hurd might throw at them."
- We Still Don't Know Enough, adds Chris O'Brien at Silicon Beat: "The story relies on a source who claims the board was angry about Hurd’s settlement with Fisher, which supposedly short-circuited their own investigation and caught them off guard. I have a hard time buying that the board didn’t know Hurd was talking to the woman about settling, but I suppose it’s possible...[Overall] it’s 'He said, She said.' And it still feels like we’re not closer to knowing the real story here."
- Are You Kidding? This Settles It John Furrier offers his working theory: "In the end Hurd's time at HP was up and he didn't want to leave. Hurd drew a line in the sand and called the board's bluff that he thought he had more leverage then them. HP board stepped up and with 'courage and guts' and played their card. Hurd lost his gambit with the board, took the severance, and then executed a full on PR effort to discredit the board. Hurd made $72m from his time at HP and another $40m+ in serverance then went on a smear campaign against HP."