Hewlett-Packard to Launch Investigation into Circumstances of Hurd's Departure
Hewlett-Packard (HPQ) is planning an independent investigation into the circumstances surrounding the forced resignation of former CEO Mark Hurd last year and the compensation package he received, court documents filed on Jan. 14 show.
The proposed probe comes in response to a shareholder lawsuit in federal court in San Jose, Calif., which claims HP's directors wasted company money by awarding Hurd as much as $53 million in severance when he resigned, Bloomberg reports.
The probe will be conducted by a committee of outside lawyers not involved in the litigation and directors who joined the company after Hurd's departure, the documents say. According to The Wall Street Journal, those would be new CEO Leo Apotheker and new Chairman Ray Lane.
The investigation will include "the circumstances surrounding the departure of Mark Hurd and the Board's decision to approve the separation agreement between HP and Mr. Hurd." The documents further add that "HP and the Director Defendants currently contemplate that the Committee will report to the Board on the results of the Investigation and the Board will decide on the appropriate response to the [shareholders'] Demand."
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The company and the shareholders who filed the suit asked the judge to put the case on hold until after the 60-day investigation period, but Hurd says he objects to the stay unless a formal motion is filed. "HP agreed to make certain information available to him concerning the Committee and its Investigation," but not all the material. For one, HP does not want to give him a copy of the shareholders' demand letter that triggered the investigation.
Last month, The Wall Street Journal reported that the SEC is also investigating the circumstances of Hurd's ouster, and allegations that he shared secret plans about his company's then-pending acquisition of Electronic Data Systems.
Hurd quit last August following a sexual harassment scandal. He was initially accused of sexual harassment by a contractor: An internal investigation cleared him of that, but found he had violated business conduct standards in trying to conceal a personal relationship with a contractor.
Shortly after his departure as CEO of the biggest maker of personal computers, Hurd became co-president of software maker Oracle (ORCL). Since then, HP has been involved in several lawsuits relating to Hurd, including one over his move to Oracle and another over his severance package. With this latest investigation, it seems the fortunes of HP and Hurd will continue to be intertwined for a while.
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