Mark Hurd Probably Deserved to get Sacked at HP
A number of very embarrassing details surrounding former Hewlett-Packard (NYSE: HP) CEO Mark Hurd's resignation from the company last year have been made public in a letter sent to Hurd from his accuser's attorney Gloria Allred. Hurd, who is now a president at Oracle (NASDAQ: ORCL), fought to keep the letter from being released, but a Delaware Supreme Court ruled yesterday that it should be unsealed as part of a shareholder lawsuit against Hewlett-Packard.
In the wake of Hurd's departure, HP shares have performed abysmally, falling around 45%. Hurd was seen as a Silicon-Valley superstar, and the scandal and his subsequent resignation, played a significant part in the company's poor performance in the minds of many shareholders. As a result, they have been seeking more details about the scandal to determine if the board was right in forcing him out.
The letter outlines Hurd's conduct with Jodie Fisher, a former model and actress, who worked as an events coordinator at Hewlett-Packard. Her job was to introduce Hurd to major HP customers at business events both in the United States and abroad. Hewlett-Packard's investigation absolved the former CEO of the sexual harassment allegations, but it did uncover expense report irregularities and determined that Hurd had violated its standards of business conduct.
On August 6, 2010, Hurd resigned from his position and settled with Foster shortly thereafter in order to keep the details of the allegations under wraps. Reports indicate that Foster was payed between $1 million and $2 million to keep quiet. The letter sent by Allred to Hurd outlines a pattern of behavior related to the executive's sexual pursuit of Fisher. In a surreal turn, Allred recounts that Hurd first became aware of Fisher through her appearance on a reality show called "Age of Love," which she appeared on from May to June of 2007. The attorney writes that the CEO was “quite taken with her," referring to her client, Fisher.
Subsequently, Hurd arranged for Fisher to be contracted as an events coordinator for HP. Allred argues in her letter that, “Looking at what ensued over the next two years, it is clear you had designs to make her your lover from the onset using your status and authority as CEO of HP and HP monies expecting her to be with you."
Allred goes on to detail specific instances of sexual harassment and writes that “At times you would behave professionally seemingly ‘getting' that she was not going to have sex with you. At other times, not, and you would relentlessly attempt to cajole her into having sex with you.” Hurd, who is married with two daughters, was reportedly miffed that Fisher would repeatedly rebuff his advances and bragged about other mistresses and said that lots of women were crazy about him, even famous singer Sheryl Crow. Crow's manager told ABC News that "I don't think she even knows him," referring to Hurd.
The letter also states that after Jodie Fisher rejected Hurd for the last time in October 2009, she was no longer hired for future HP events. It is important to note, however, that Fisher has since stated that the letter was "full of inaccuracies," and she has also said that she never wanted Hurd to lose his job over the scandal, adding that the CEO's behavior didn't hurt HP or its reputation. These statements were made after she settled with Hurd.
A number of other disturbing allegations, however, can be found in the letter. A particularly egregious accusation is that Hurd told Fisher about his company's plans to acquire technology services company Electronic Data Systems long before the deal was ultimately completed. This certainly would have been justification for the board asking for Hurd's resignation in addition to the other improprieties that their investigation turned up.
Despite the controversy over the factual validity of this letter, which Fisher herself said is not accurate, it is hard to believe that the whole thing is made up. Jodie Fisher, in the wake of her 7 figure settlement, has no reason to further muddy Mr. Hurd's name and all parties, at this point, just want the story to go away. The bottom line is that the letter outlines some unbecoming behavior on the part of Mr. Hurd, and at least one instance where he may have violated his fiduciary duty to the company. If some of these allegations are true, combined with the board's expense account findings, then it was the right decision to force Hurd out.
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