HP proposes new probe into Hurd's departure
In response to shareholder lawsuit, HP is ready to conduct another probe into the circumstances of the former chief executive's departure.
Hewlett-Packard is ready to launch an "independent" investigation into former CEO Mark Hurd's departure from the company.
The probe would investigate the circumstances of Hurd's resignation from HP and his separation agreement with the company, according to a January 14 court filing (see below) in U.S. District Court for Northern California. The filing is in response to a shareholder lawsuit that claimed HP wasted corporate assets on an "unreasonable and grossly excessive severance award upon his resignation." HP awarded Hurd a compensation package valued at about $35 million at the time of his resignation.
HP proposes the probe would be led by a committee of outside attorneys and board members who joined the Silicon Valley giant after Hurd's departure. Hurd, who is now president of HP rival Oracle, resigned as chief executive in August 2010 after sexual harassment allegations led to an inquiry that found he had misreported his expenses to the company.
As The Wall Street Journal noted, the only two board members who qualify under that condition are CEO Leo Apotheker, a recent target of scorn from Oracle CEO Larry Ellison, and Chairman Ray Lane, who is a former Oracle president.
The scandal surrounding Hurd's departure has also reportedly attracted the attention of the U.S. Securities and Exchange Commission. The SEC is reportedly examining allegations that Hurd passed valuable information about HP's pending acquisition of Electronic Data Systems (EDS) several months before the deal was made public. The person Hurd is said to have told about the EDS purchase is Jodie Fisher, the former marketing contractor who accused Hurd of sexual harassment.
HP officially announced its intent to acquire EDS for $13.9 billion in May 2008.
During a previous HP investigation, board of directors felt that Hurd's settlement of a sexual harassment claim impeded its probe into allegations against its former chief executive's behavior. Hurd settled with Fisher on August 5, 2010, and the board announced his resignation from the helm of the tech giant the next day, concluding that while Hurd had not violated the company's sexual harassment policy, his conduct "exhibited a profound lack of judgment."
HP representatives declined to comment on the proposed probe.