HP’s Announcement of Mark Hurd’s Resignation Raises Eyebrows
When HP revealed the surprising resignation of Chairman and CEO Mark Hurd on Friday, it seemed the company wanted to project an image of moral integrity.
In their press release, HP stated that an investigation found no violation of their sexual harassment policy regarding Hurd. This was meant to assure stakeholders that ethics took precedence over performance, even for the leader credited with revitalizing the company.
People were quick to commend some businesses for adhering to higher standards compared to Wall Street, especially amidst a financial crisis where so many continued to receive significant bonuses.
However, those sentiments faded when it was revealed that Hurd would depart with a retirement package close to $30 million—hardly a sacrifice for moral principles.
Supporters of Hurd argue that his contract entitles him to such a deal. After all, a contract is a binding agreement, right? Still, there’s a significant caveat: if he had been terminated “for cause,” HP could have potentially avoided any payouts at all. This would have lent more credibility to their ethical stance.
Typically, “for cause” refers to a serious breach of company policy, which every organization should have guidelines on. Hurd could have contested such a decision, which might have put him in a position to take legal action against the company, thereby allowing HP to appear more principled. Yet, it seems this wasn’t the direction the HP board preferred.
Interestingly, the press release announcing Hurd’s resignation began with the phrase, “Hurd has decided to resign from the board and his position soon.” This phrasing suggests a planned exit rather than a disruptive dismissal.
In a follow-up conference call, it was indicated that a legal settlement would take place. What does this imply? It signifies that HP was eager for Hurd to exit smoothly, possibly hinting that the company was lacking a solid case against him. If other internal matters or potential lawsuits were at play, there might be lingering concerns about Hurd’s reputation at HP should those issues resurface.
In the end, HP may operate in a free market, allowing Hurd to move on. But it’s hard to buy into their claim of having a strong moral foundation.
