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December 21, 2010

SEC Investigating Hurd's Exit from HP

When Oracle welcomed Hurd as its new co-president this fall, much attention was also focused on his ousting from HP. Now, it seems the Securities and Exchange Commission is taking a closer look at Hurd’s movement.

According to an Associated Press (News - Alert) report, the SEC (News - Alert) is investigating Hurd’s resignation, as the surprising exit triggered an immediate $9 billion drop in the market value of HP. His resignation also involved allegations of sexual harassment and inappropriate sharing of inside information.

HP has announced that it is cooperating fully with the investigation. The company filed a lawsuit to try and stop Hurd from taking the Oracle (News - Alert) position.

While the SEC has declined to comment on the investigation, a spokesperson for Hurd, David Shatterfield, noted that Hurd acted properly in all respects and it is understandable that the SEC is looking into the events that surround his departure, especially given the drop in the value of HP stock.

Wall Street tended to hail Hurd’s five-year reign at HP, although many employees reviled his leadership due to deep job cuts and cost cuts. This environment changed swiftly when former HP marketing contractor, Jodie Fisher, accused him of sexual harassment.

HP’s board reported that they could not find evidence to support the harassment claims, but did find inaccuracies in Hurd’s expense reports for outings with Fisher. The SEC is looking at the expense reports and another Fisher allegation that Hurd told her in advance about HP’s $13.9 billion acquisition of Electronic data Systems in 2008 and the possibility that Hurd destroyed computer evidence.

A person familiar with the story told the Associated Press on Monday that the computer issue involved information the SEC is requiring concerning an HP computer that Hurd kept at his home. The person reported that Hurd had the computer cleaned before returning it to the company in an attempt to protect the privacy of his family.

Hurd’s severance package also outraged many as he received $12.2 million in a cash payout and exercised options on some $30 million worth of HP stock. He then filed papers to sell the stock. He also gave back restricted stock worth $14 million as part of his settlement with HP to allow him to work at Oracle.

Despite this handsome payout to Hurd and the settlement between him and HP, shareholders have still not recovered.


Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf
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