HP CEO Mark Hurd resigns over sexual harassment investigation (updated with liveblog!)
By Nilay Patel 
posted August 6th 2010 5:51PM
posted August 6th 2010 5:51PM
Wild news out of HP just now -- CEO Mark Hurd has just resigned over a sexual harassment investigation. Hurd and HP's board of directors decided that he should resign following a sexual harassment claim against Hurd and HP by a former marketing contractor -- HP claims that although there was no violation of its sexual harassment policy, Hurd violated the company's standards of business conduct by submitting inaccurate expense reports that covered his relationship with the contractor. CFO Cathie Lesjak is taking over on an interim basis, and she's actually upping the company's forecasts for next quarter, saying Mark's resignation has nothing to do with HP's performance and everything to do with his behavior. A committee led by former Netscape CEO Marc Andreessen has been formed to find a new CEO; Lesjak has asked to be excluded, and HP declined to answer if Jon Rubinstein was being considered when we asked.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.
Cathie
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.
Nice picture
@semblance o shit what can this mean for PALM
@semblance
No kidding do you see the way he's man handling those air boobs? No wonder he's in so much trouble....
@Nanosman1994
He was trying to put his webOS somewhere it didn't belong. :(
@Nanosman1994
His preoccupation with palm might be part of the problem here...
@semblance
"I mean.....your boobs are huge......I mean........I wanna squeeze em........MAMA...mchmchmchmchmch." -liar liar-
@Nanosman1994 I think there's enough palming going around. lmao
couldn't help it.
Seriously though, he must be in REAL trouble to resign before the investigation is even over. Hell, to resign in general he must have been doing something very wrong. I wonder if he held a chick captive or something.
@semblance
Needs Caption Suggestions
@semblance
Did HP rape PALM ,,, I don't undersrand
@Slug Haaaaaaaaa AIR BOOBS! Too funny.
@DrDeaf
You want a caption? - "...but they were THIS big!"
Seriously though, sexual harassment is not cool. But we also don't know if it's true or if the female accusing him to get money. The fact that he was doing all this to be with her would make it seem the "fooling around" was mutual. Why would she call "sexual harassment" now? Hmmm....
Someone dun goofed up...
@Nanosman1994 His PALM got him in trouble
@semblance OMG. This is so unexpected.
@semblance He should've just sticked to his Palm.
@semblance
Can someone photoshop that pic with someones ass around his hands
@semblance
I have a feeling they didn't catch him fondling the Slate.
@GarrettQ
Hahaha.
Looks like I goofed up...
DAAAAAAAAAAAAAAAAAAAAAAAAMN!!!!!
Put Rubi in charge and fast track the next WebOS phone!
@Plazmic Flame "These are not the Palms you're looking for" Is what he said in his defense as his picture was taken
@semblance
C - E - Oh no he didn't! ;)
@ac2913
i reckon he breached her fair usage policy ;)
@Plazmic Flame
Harrasment and bulling may happen in many companies and normally the companies cover that if it is done by manager.It is not necessary the sexual haressment complaint to be filed by female, it could be by male too. Very good for HP to maintain the business standards and not to allow the high management to go too far. I do not expect that a high manager may be kicked out of any other company for that.
This guy was easily making $1 Million a year (minium, very very minimum) what effing girl would be worth that? She better have been as hot as Jessica Biel or Kim Kardashian. If not, he blew it... big time. Hope it was worth it.
@semblance
Maybe the vendor was a contracted escort and he was actually fired for trying to expense his rent-a-date?
@semblance
The sexual harassment laws in this country are severely outdated. Now we have situations where they are being used as leverage by women in the workplace and internal business politics. Yes, there are evil men out there that prey on women in the workplace and use their position to to advance a sexual agenda. But, when a woman can claim that she felt uncomfortable and was a victim of sexual harassment because of the way her boss looked at her, and get him fired of the company held liable for damages, then there is a problem.
Clearly, it seems that's not what happened here. This guy lied and made false reports which would be grounds for termination. But, i ask, why did he feel he had to hide this relationship, other than to keep his wife, if he's married, from finding out?
@semblance He should have kept his palms to himself.
@semblance : They wanted him out, so hes out.
My message to everyone:
1) Sexual Harassment is wrong, end of story.
2) Before you screw around, think of your wife and then don't do it.
3) If you don't have a wife, then think of the money.
If you still screw around, you blew it. Even if you don't get caught.
@Plazmic Flame
"If you still screw around, you blew it."
Isn't that the point?
@BigJayDogg3
It's more of an integrity issue that HP was right in deciding that Hurd was no longer fit to run as CEO.
Clearly it's the case where you don't shit where you eat. His failure doing this, makes him deserve to be forced to resign.
However, I'm not entirely confident in HP's decision to give him $12m to not sue them. It was his fault, therefore, he should be held accountable for any wrongdoing on his behalf.
Hahaahahah LOLz
I didn't even read the title before I saw the picture and thought he was telling his mates what he scored last night.
Yes, with Palms' wide open,
Under the fluorescent light,
Welcome to Room Eight,
I'll show you everything
...no mister, no!!!
@Abraham Lincoln thanks, but that jokes been made like 100 times already.
@Plazmic Flame Dude, if a Dick named Plazmic Flame has to tell you what's right and wrong, you fucked up.
@Cold Dead Fingers
U Mad?
@Plazmic Flame The resignation makes me a sad panda.
Oh boy!! :-)
@spartandre217 Good news for me and the 10s of thousands of others that were laid off former HP employees. That bastard was always out for himself. In any case, I got a good higher paying job now.
@spartandre217
I guess this CEO can't multitask lol
@victor
I was just glad to hear this after the way he dissed smartphones. But I guess your reason for hating him is closer to home.
Either way, good on ya HP, for ditching this loser.
@Smart People Play Tuba
Yeah, now if the American people would follow HP's example and ditch whore loving Sen David Vitter and Sen. Fraud aka John John Ensign.
Who lives in the east 'neath the willow tree?
Sexual Harassment Panda.
Who explains sexual harassment to you and me?
Sexual Harassment Panda.
"Don't say that! Don't touch there!
Don't be nasty!" says the silly bear.
He's come to tell you what's right and wrong.
Sexual Harassment Panda.
@ChazClout Damn beat me too it and with much more detail. You have that saved in text doc or something?
@ChazClout
South park?
@KAL326
http://lmgtfy.com/?q=sexual+harassment+panda+song
:D
@ChazClout Beat me to it too :(
On the other hand, uprank for you :D
@ChazClout
Pwned! LOL
he got so excited with touch screen this and touch that, he touched one thing to many and....
@rmbrown09 He showed her his "pinch to zoom" gesture.
@thomasaquinas
LOL.. you guys are hilarious!