HP to pay Hurd millions to walk away, investors suffer
Whatever Mark Hurd did that cost him his job as CEO of Hewlett-Packard, the world’s largest technology company, it wasn't enough to cost him a payday that could top $40 million.business Updated: Aug 10, 2010 21:00 IST
Whatever Mark Hurd did that cost him his job as CEO of Hewlett-Packard, the world’s largest technology company, it wasn't enough to cost him a payday that could top $40 million. Meanwhile, with little still known about why an actress and HP contractor threatened Hurd with a sexual-harassment lawsuit, stockholders took a $9 billion hit Monday, and HP’s 300,000 workers were left to wonder about its future.
HP insisted that the problems it uncovered with the CEO’s behavior were limited to falsified expense reports for his dinners and other meetings with Jodie Fisher. Hurd has settled with Fisher for an undisclosed sum, and both parties have said the relationship was not sexual.
Hurd said an assistant prepared all of his expenses. He has offered to reimburse HP for the errors. The company has offered no further details and says it is focussed on finding a successor.
Hurd gets $12.2 million in severance, plus stock and options that could bring the total value of the package to more than $40 million.
Analysts said the generous package shows Hurd was highly valued for restoring steady results to the company after a period of upheaval that followed the stewardship of Carly Fiorina.
Fiorina, the Republican nominee for Senate in California, got a severance package worth $21.1 million after she was ousted from HP in 2005.
“It tells you how important people think he is to HP,” said Jayson Noland, an analyst with Robert W. Baird & Co. “It gives you a sense for how valuable a really good CEO can be.”
Jeffrey Sonnenfeld, an expert on CEO leadership and corporate governance issues, called Hurd’s pay package a "damning indictment" of the way CEO hiring contracts are set up, making it impossible to fire executives for cause and therefore stop any severance payment.
"If any employee at the firm had done what he did, they would have been fired immediately," he said.