HP Board Names New Members, Investigates Hurd's Departure
Embattled corporate board welcomes five new members, says good-bye to four incumbents, and gets into investigative mode, prodded by a shareholder lawsuit.
It's possible that Jan. 20,
2011, might be the biggest news day in the history of Hewlett-Packard's
board of directors.
Three news stories came to the fore on that day:
Story No. 1: In a Jan. 14 court filing, it was revealed that HP's board has designated a committee to investigate the circumstances of former CEO Mark Hurd's departure from the company in August 2010, following sexual-harassment allegations by former HP contractor Jodie Fisher.
At that time, according to HP, no evidence of sexual harassment could be found-both Hurd and Fisher have said that there was no sexual relationship between them-but that Hurd had violated company business policies through filing false expense reports to cover up a personal relationship between the two.
Later, Hurd and Fisher settled their dispute out of court.
This court filing comes as the result of a shareholder lawsuit to unearth the details about why the board forced Hurd out. Hurd, while controversial at times, nonetheless was an effective administrator who kept corporate costs in line and helped lead HP to become the world's largest IT company during his five-year tenure.
Thirty days after leaving HP, Hurd was hired by Oracle co-founder and CEO Larry Ellison, who promptly named him co-president of the company and chastised the HP board for letting him go.
Story No. 2: Following the close of the day's Wall Street trading, HP announced that four directors-some of whom had been closely connected with Hurd, either personally or professionally- have left the board. They are Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany.
Story No. 3: Five new members have joined the board. One of them is former eBay CEO Meg Whitman, who lost the California gubernatorial election to former Gov. Jerry Brown last November, despite spending nearly $160 million to finance her own campaign.
The others new members are Shumeet Banerji, CEO of Booz & Company; Gary Reiner, former CIO of General Electric and an adviser at the private equity firm General Atlantic; Patricia Russo, former CEO of Alcatel-Lucent; and Dominique Senequier, CEO of AXA Private Equity.
The incoming directors, who are independent of any association with Hurd, will conduct the new Hurd inquiry with assistance from outside lawyers, the January 14 court filing said.
According to reporting from The Wall Street Journal and The New York Times, HP used to hold party-like events for customers, and Hurd approved of paying Fisher $1,000 to $10,000 to attend the events and to dine with him afterward. After HP stopped holding the events, Fisher accused Hurd of sexual harassment, and he was later questioned regarding charges on his expense reports related to the events.
A number of shareholders have been up in arms at the dismissal of Hurd, who had led HP out of a slump of sorts in 2005 following a difficult merger with Compaq and general disarray under former CEO Carly Fiorina. During Hurd's time as CEO, HP shook off two periods in which the stock dipped below $30, rebounding to a high of around $54 last May.
All the news didn't affect HP's stock price that much on Jan. 20; the stock was down 34 cents a share, to $46.44, in after-hours trading.
eWEEK reporter Michelle Maisto contributed to this story.