Former HP CEO Mark Hurd rewarded with a $40m severance after being forced to resign over fraudulent expense reports
By Nilay Patel 
posted August 6th 2010 7:17PM
posted August 6th 2010 7:17PM
Worried that former HP CEO Mark Hurd might not know what to do with himself after getting caught falsifying expense reports to hide girl #2 and being forced to resign? Don't be: ol' Mark's getting a $12,224,693 severance payment in exchange for agreeing not to sue HP. Yep, Mark Hurd just got $12 million in cash for fraudulently filing expense reports to conceal his mistress -- not a bad trick if you can pull it off, we suppose. (We don't know how much he'll have to pay back, but we're guessing he'll have a little cash left over.) Oh, and he's also having his option to buy 775,000 shares of HP stock extended to September, which is pretty groovy considering HP actually upped its quarterly forecast today, some other assorted stock-related compensation, and 18 months of health and dental benefits. Whoever said a little white collar crime doesn't pay?Update: CNBC has sources claiming the total value of Hurd's severance including stocks is closer to $40-50 million, give or take. That's... well, that's a lot of ink cartridges.
Further proof that capitalism is alive and well!
/jealous
@o0
Only in America!
@o0 Go America, Go Broncos.
I think it is interesting there is a clause to not sue HP when he was committing fraud.
@o0
maybe not for long..... *hints to Obama*
@o0 +1
@Big Wizz Clearly you haven't been paying attention to the other major (non-US) corporations that have "shed" their CEOs recently.
@o0
maybe not for long... *hints to Obama*
@o0 And last year he made like 5mil extra. What the hell is up with all these crap CEOs making so much money? He laid off thousands of people over the last few years while raising his own salary. I'm glad he's gone. Jon Rubinstein should be CEO now. That would be so cool.
@o0 The only reason we can sit around and complain about this corruption in private companies is because the massive corruption in socialist and communist entities is kept secret.
@o0
I love how nobody has a clue of what he really did at HP, but suddenly we're all experts on what should or shouldn't happen. To the Capitalism bit, you are misinformed. The idea of paying people you fire is a creation of the socialist agenda.
In the capitalist society there would be no severance or anything like that because you couldn't be sued for wrongful termination. The idea of buying people working at your company is created by the socialist mindset that everyone is "entitled" to a job, so when a company fires someone, it's being unfair and taking away their livelihood and that's just terrible terrible and there should be some kind of recourse. Blah blah.
@RogerX Not so secret http://en.wikipedia.org/wiki/Corruption_Perceptions_Index
@bob1000
"What the hell is up with all these crap CEOs making so much money?"
It's quite simple, the board of directors who hires and sets the pay of the CEO is usually made up of current, former and hopeful CEO's of other companies. In order for a board made up of CEO's to justify getting paid ridiculous amounts, they have to pay other CEO's ridiculous amounts of money. That way they can say the ridiculous amount of money they want is simply inline with other CEO's.
@o0
Corporate governance in America is a joke. This is one reason why the world thinks we're a bunch of assholes.
@Iromania
HP does it and it doesn't cost me a nickle. Feds do it and more money gets taken out of my check each month.
@o0
This has nothing to do with capitalism and everything to do with the US Court System.
He should have been rewarded with a boot out the door or jailtime if he broke laws.
@esper256 : "In the capitalist society there would be no severance"
Severance is purely a contractual arrangement between private parties. There is nothing inherent to severance which implies and agreement not to sue, that us just an additional term that the private parties in this case have added.
Wrongful termination is a breach of fiducial responsibility to the shareholder as well as a contractual breach with the employee.
@d0mth0ma5 clearly, you're an a-hole.
Unbelievable.
@o0 This guy is not going to be touching any women soon so he's going too have to stick to his Palm's
@Big Wizz
Not arguing the merits of socialism or capitalism, but only in America is executive compensation so overblown. This article makes me somewhat sick. Even if he did a good job, that's overpaid.
@Big Wizz No, just British. That's all I was referring to.
@o0
number one number one number onee number oneeeeee
@o0 I don't know why people keep calling for Rubenstein to be CEO. While he was at Palm he created a great mobile OS, but, more importantly, he squandered it with shitty exclusivity arrangements and lackluster hardware with poor build quality. One great idea does not a great CEO make.
@Why should I have all the fun The world doesn't think we're a bunch of assholes you communist bastard.
@liftedngifted1
That was a funny joke, but he just got 12 million dollars. I think his [pun about Palm/WebOS and it not being used]
@o0
It's good to be the king.
@esper256
Hence the irony of his statement. Genius.
Look at wall street. you think that's CAPITALISM when a company almost dies, then the government bails them out?
Wake up... Capitalism in America is Greed, unless you falter, then ask for a handout...
If it were true capitalism, companies would be allowed to die, and guys like this would be allowed to be fired.
Doesn't matter anyway, he probably got tons of stock during his tenure... he's obviously a wealthy man.
@esper256 You have about the most twisted and pathetic understanding of history, politics and economics I have ever encountered.
@Nilay "That's... well, that's a lot of ink cartridges."
Haha! Not with the prices they charge for those fuckin' things it's not.
@o0
How does one spend $40 mil on a whore?
@Big Wizz
Oops, I meant $12 mil. How does one spend $12 mil on just one whore?
@Why should I have all the fun
Maybe it's a part, but honestly? It's not even in the top 10.
@bob1000
These pricks enjoy laying off low-level employees to boost their own salary and self-esteem. They're nothing but crooks that deserve to fall on a sword if they were even close to being honorable men. I can't say I'm not envious of them since even bad performances nets them bonuses in the millions of dollars and all the mistresses they can handle. He'll go on to live a good life and maybe even getting another high-level job in a few months. These useless pricks are truly untouchable. The only exit he should get is a push from a corporate building rooftop. Forget golden parachutes, they deserve lead overshoes. Every employee that lost their job under him should be entitled to kick him once in his executive gonads.
---- Yeah because Jon Rubenstein really turned Palm around huh? I like Ruby, he's a likable character with a fighting spirit, but lets not confuse that with Top flight CEO ability, He had the greatest phone OS ever and couldn't develop a decent set of hardware.
@McKirf because he's stupid enough? then the question would how how did he become a CEO?
@o0
Although $40m severance sounds outrageous, according to CNN he made $30m a year. Of course it's still a huge sum, but put into perspective, it's not all that shocking that he would get that much.
@Wesscoast
Your idea of Capitalism would not only allow companies that are integral to society to get too large, but you would let them all crash and burn. Of course, if you understood macroeconomics and had a slight interest in history, you would realize that Hoover did exactly what you are talking about. Guess what that got us.
@bob1000 Laying off employees in tougher times is called "downsizing" and is a valid financial strategy, very often used. The money saved can easily make up for his wage increase. :)
The employees, on the other hand... well, that's just life...
@radarskiy
Good point, but most large corporations usually secure themselves well in terms of terms of dismissal in a CEO's contract. These large severance packages are largely an effort to get someone out on very short notice.
For instance, Mark Hurd could've sued HP, calling his dismissal frivolous. The judicial process in these cases tend to be drawn out. Of course, Hurd would eventually lose, but as long as there is a legal dispute as to whether his dismissal was frivolous or not, he remains the CEO.
To most corporations, that leadership limbo is more damaging than a 40-50 mill. severance package, where the CEO accepts the terms and gets out the door.
In the European Union, it tends to be difficult to fire people, as there is a mountain of bureaucracy regarding what constitutes a reason of dismissal. In the U.S., lawsuits are so efficient at hampering private businesses that severance is necessary.
Capitalism isn't to blame for this. The American juridical system's tolerance of frivolous lawsuits is to blame.
@sk1d : It is sad, isn't it. Capitalism exploited to the maximum and they do not care at whose expense it is done with as long as it is abused!.
There should be a cap at earnings for CEOs so that they can do the right balancing act towards their employees, customers and the public at large.Rather than maximizing profit at whatever expense (even skirting legal rules in some cases ...). The system is definitely very sick.
That enough for me to live for 12 years, and he gets that in a day? Bull shi
You earn $1 million a year?
Bull.
@BlackedOut 3 kids and a wife
@BlackedOut, This is America; he doesn't have to earn what he spends. He only said that he spends $12 million in 12 years. But that it is still bull. >_>
@Cainhunpi You do not need $1million a year to support with a wife and 3 kids!
@Cainhunpi 1Mil a year for wife and 3 kids? Not exactly a simple life style...
@d0mth0ma5 But you DO need $1million a year to support a wife, three kids, and one mistress.
@wakeuplan Well of course, that's why Tiger had to keep playing Golf.
@Cainhunpi Are you really Latrell Sprewell? "I gotta feed my family!"
@Cainhunpi what?! even half of that could last me the rest of my life.