Shareholders sue HP over Hurd's sex scandal probe
'Give us back our money'
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HP faces a lawsuit over the departure of Mark Hurd from shareholders angry at the massive payoff he received and accusing the board of failing in their legal duties.
Hurd was allowed to resign as CEO last week after an investigation into sexual harrassment allegations uncovered false expenses claims. He walked away with a $12.2m cash payoff and and improved stock options.
HP's CFO Kathy Lesjak has temporarily taken over as CEO while the firm seeks a replacement.
The lawsuit, filed for shareholders by a Connecticut-based law firm against both HP and Hurd, alleges that "as a result of Hurd's, Lesjak's, and the HP board's shortcomings, HP lost significant credibility, and the market punished HP (and its shareholders) upon the 8/6/10 revelation of Hurd's termination - slashing its stock rating and erasing over $9 billion in market capitalization when the company's stock resumed trading on 8/9/10".
The board, mostly appointed by Hurd, is accused of gross mismanagement, waste of corporate assets, violating the California corporation code, misappropriating information, and unjust enrichment.
The plaintiff, the Brockton Contributory Retirement System, also aims to reclaim Hurd's severance package for HP, and to enforce governance changes on the board. The complaint says HP violated corporate law by failing to inform shareholders of the investigation into Hurd, who was also its chairman.
HP has declined to comment on the lawsuit. ®
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COMMENTS
getting paid $12 million for doing a bit of sexual harrasment
I've always wondered how that works, how do these people get paid to leave where anyone else would have been marched out the door in disgrace..
If anyone can explain to me how come these directors/ceos/bigcheeses get paid phenomenal amounts of money despite all their fuckups, i'd be most grateful, it just doesn't seem to make sense.. is it as simple as the fact that they make the rules? -are they not accountable to anyone?
-and how come they tend to get hired again by someone else shortly after to do exactly the same thing all over again.. if your average pleb gets fired fired for incompetence or something as nefarious as sexual harrasment it tends to be detrimental to future employment, not to mention you don't get paid to leave.
Messrs. Hewlett and Packard must be ...
spinning in their graves. They were beacons of American industry and were honourable in their business dealings.
The trash management that has assumed the mantle has done little except besmirch their founders names. It is shameful.
In an earlier career I bought HP test products knowing they were high quality and that they would stand behind them in case of failure.
I wouldn't even by an ink refill from them now.
@Anonymous Coward
Or better yet...
How about a beancounter as CFO, with Engineers in charge of the technical divisions. Get an experienced salesman in charge of the sales divisions and someone with decades of marketing experience in charge of marketing.
Make the CEO someone with a diverse background: management is certainly required, as is some experience with big-ticket sales but also a technical background is important as they will be overseeing a hugely technical company.
Get a chairman who has stock market experience and can serve as the interface between the shareholders and the board of directors. Suddenly you have people qualified for their positions with actual relevant experience to the areas they are overseeing. Get them in a room and have them do things like debate, argue, innovate and drive a corporate vision.
Apparently in tech companies however, that sort of talk is just crazy…
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