The news broke on Friday regarding the resignation of Mark Hurd as the chairman and CEO of HP (Hewlett-Packard). The reason for his resignation was given that he was the subject of a sexual harassment complaint. The related investigation also uncovered that he also falsified expense reports in order to conceal the inappropriate relationship, even though the relationship was not sexual in nature.
So, the bottom line is that Hurd was forced out for dishonesty and such actions would get most employees fired without any recourse.
But here is the kick in the gut (especially if you are an HP shareholder)
According to CBS News, Hurd will get the following:
- $12.2 million severance payment and 350,000 shares of HP stock worth around $16 million according to Friday’s closing price.
- Extended the deadline to exercise an additional 775,000 options of HP shares.
I guess that when you are a CEO and dishonest, you can lose your job and get rewarded. If a normal employee had done the same thing, they would have been fired and been given nothing!
I think that HP shareholders need to ask the Board of Directors some hard questions. Why would they “reward” a dishonest CEO with an unbelievable severance agreement along with other perks?
I guess I will have to teach my son that in some cases dishonesty does not have a severe penalty. This one is going to be tough to explain. Luckily my son is only 4 and does not understand this stuff, but older kids and some adults may have questions also.
What really bothers me is that the CEO of the company that I work for serves on the board of HP!
Enough said… your comments or opinions?
From The Unknown 
2 observations:
1.) Perhaps (and I suspect this) he had a contract that specified the severance package. And the options were something previously awarded him;
2.) Not sure why it bothers you that the CEO of your company serves on the HP board. I know how boards work. a.) There might be (and I really don’t know) 20-30 on the board with subcommittees, etc. There might have been (previous point – I suspect this) a previous contract that specified separation details. b.) It’s possible that he objected to this but was just one vote.
Jim
Thanks for your observations. My biggest problems are that if I falsified expense reports, I would be fired, no questions asked. Hurd does this and gets rewarded! I think that this incident should help people speak out against these exorbitant pay packages. Something is definitely wrong when CEO’s make more than the President of the United States. I think the President has a much more stressful and more important job than any of these CEO’s. If the normal guy were allowed to serve on a board instead of boards being lined with CEO’s doing favors for each other, I think things would be far different at most publicly traded companies!