Mark Hurd's Sexual Harassment Settlement Took HP's Board by Surprise

Hewlett-Packard (HPQ) and former CEO Mark Hurd seem to be giving different accounts of events leading to and following Hurd's departure on Aug. 6, Bloomberg and the The Wall Street Journal reveal.

Perhaps most telling is that, according to the reports, the board was surprised Hurd had settled the sexual-harassment claim before the directors could learn more about the incident. This contributed to their unanimous vote to oust Hurd the following day.

"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 WSJ reports, citing people familiar with the matter. But this account is contrasted by others who are familiar with "Hurd's thinking," as the WSJ put it. Those sources say the board had instructed him to settle.

Movie-Watching at Work

HP began investigating the sexual harassment claim after Hurd received a letter from Jodie Fisher's lawyer on June 29. Fisher was an HP marketing contractor. While the company said officially that he didn't harass Fisher when it announced Hurd's departure, it said Hurd had violated HP's code of business conduct, including filing inaccurate expense reports.

Specifically, the probe found that Fisher received numerous inappropriate payments from HP during her two years as a contractor and that Hurd concealed their personal relationship. On this account, too, the stories differ, and those familiar with Hurd's thinking claim he didn't conceal the relationship

Bloomberg adds that "Investigators also found evidence on Hurd's work computer that he had viewed Fisher's adult-themed movies," and it named a few.

The board, which voted unanimously to remove Hurd, has also agreed to a large settlement package worth more than $35 million. Already, the board is subject of a lawsuit over its handling of the matter and the exit package granted to Hurd.