Update: We liveblogged the media call -- check it after the break!
Update 2: A quick note from the investor call, which mostly repeated the same info -- interim CEO Cathie Lesjak said that although Mark Hurd was a "strong leader, at the end of the day, he didn't drive our initiatives -- it was the organization that supported Mark in driving those initiatives." Ouch -- given Mark's recent history of saying things like "we didn't buy Palm to get into the smartphone business," it certainly seems like he might have been a little distracted.
Update 3: We've just received the full text of the letter interim HP CFO Cathie Lesjak sent to all employees -- check it after the break.
This is to advise you that Mark Hurd, Chairman and CEO of HP, has resigned from the company effective immediately. Mark's resignation was submitted at the request of the company's Board of Directors as a result of inappropriate behavior in which he engaged that violated HP's Standards of Business Conduct and undermined his ability to continue to lead the company.
At the request of the Board I have agreed to serve as interim CEO until a new, permanent CEO is hired. During this time I also will continue to perform my duties as CFO. The Board has formed a committee to undertake a search for a new CEO, and candidates from inside the company as well as outside the company will be considered. I have informed the Board, however, that I do not wish to be considered for the role of permanent CEO, and I have removed myself from being a candidate for that position.
While this news is unexpected, HP remains in an exceptionally strong position both financially and in the marketplace. It is essential, however, that we remain focused and continue to achieve – if not exceed – our operational and financial objectives.
Because there is likely to be considerable media coverage of this announcement during the next few days, I wanted to be the first to share the facts with you.
Mark's resignation followed an internal investigation into a claim of sexual harassment asserted against Mark and HP by a woman who is former contractor to HP. The investigation was conducted by outside counsel in conjunction with HP's General Counsel's office and was overseen by the Board. Based on the investigation it was determined that the former contractor's claim of sexual harassment was not supported by the facts.
The investigation did reveal, however, that Mark had engaged in other inappropriate conduct. Specifically, based on the facts that were gathered it was found that Mark had failed to disclose a close personal relationship he had with the contractor that constituted a conflict of interest, failed to maintain accurate expense reports, and misused company assets. Each of these constituted a violation of HP's Standards of Business Conduct, and together they demonstrated a profound lack of judgment that significantly undermined Mark's credibility and his ability to effectively lead HP.
As we regularly remind all employees, each of us is expected to adhere strictly to the Standards of Business Conduct in all of our business dealings and relationships. This expectation applies with even greater force to HP's CEO and other senior executives who, given their positions, must set the highest standard for professional and personal conduct. The investigation that was conducted revealed that Mark had failed to meet this standard.
We recognize that this change in leadership is unexpected news. We also know that HP's success in recent years is due to the collective efforts and hard work of more than 300,000 talented employees who have formulated far-reaching strategies and achieved our objectives better than anyone else in the industry.
On Monday morning we will conduct an all-employee webcast to discuss this matter further and answer your questions. To join the webcast please click on this link.
In closing, I would like to thank each of you for your contributions to HP, and to ask that in the weeks and months to come we do everything to ensure that HP's future, like its past, is one of innovation, operational excellence, and the delivery of world-class products and services.
All the best.
Liveblog of HP's Media Call:
3:22PM We're on the call now -- HP is saying that Mark Hurd had a close personal relationship with a contractor who was hired by the office of the CEO, and there were numerous instances of reimbursement where there was not a legitimate business interest for HP. Mark also submitted inaccurate expense reports to conceal his relationship with the contractor, and that violated HP's standards of business conduct.
3:22PM Interim CEO Cathie Lesjak on the line -- she's told the board that she doesn't want to be considered in the CEO search, but she says she's "never been more confident" in HP's future.
3:23PM "My principal priority as interim CEO is to continue our path that is giving us market momentum as we conduct the search for a new CEO."
3:24PM It's Q/A time -- this should be interesting.
3:25PM First question, from ABC News: "Can you tell us the amount of money involved in these inaccurate expense reports?" HP: We're not going to get into details, but there were numerous instances, and the issue was integrity at the highest levels. The amount is not the issue from the board's perspective.
3:26PM Next question, from NYT: "Can you explain the nature of the contractor and the circumstances of what happened here?" HP: This was a marketing contractor who worked from fall of 2007 through the fall of 2009 -- she was never an HP employee. Not getting into her age or description -- she's chosen not to come forward.
3:27PM Bloomberg: How did this come to the board's attention, and how was it dealt with? HP: The contractor's attorney sent us a letter, and the investigation began the next day.
3:28PM Dow Jones: Did Mr. Hurd provide payments to the contractor, or was this a matter of dinners and hotels? HP: We're not going to talk about Mr. Hurd, but HP paid the contractor's fees for services and her expenses -- there was a question about whether her services were actually provided.
3:29PM Financial Times: What were the services? HP: Marketing services.
3:29PM Investors Business Daily: How is the CEO search process going to play out, and what's the timeline? HP: The search committee is moving as quickly as they can.
3:30PM Reuters: You raised your guidance for the year -- what gives you that confidence? HP: We raised our guidance because of strong business performance.
3:31PM HP: Mark Hurd resigning has nothing to do with the operational performance of HP -- it has everything to do with his actions and integrity.
3:32PM Next question (from us!): Will Jon Rubinstein be considered for the CEO position? HP: We're not identifying any candidates at this time.
3:32PM PC Mag: Any litigation here? HP: Nothing has been filed, we have an agreement with Mark in place.
3:32PM And that's it! There's an investor call coming up, we'll let you know if we hear anything there.