HP is saying that Mark Hurd submitted inaccurate expense reports to conceal his relationship with the contractor, and that violated HP's standards of business conduct.

CEO Mark Hurd has just resigned over a sexual harassment investigation. Hurd and the HP's board of directors decided that he should resign following a sexual harassment claim against Hurd and HP by a former marketing contractor -- HP claims that although there was no violation of its sexual harassment policy, Hurd violated the company's standards of business conduct by submitting inaccurate expense reports that covered his relationship with the contractor.

From current HP investor/ analysts conference call

>Dow Jones: Did Mr. Hurd provide payments to the contractor, or was this a matter of dinners and hotels?

>HP: We're not going to talk about Mr. Hurd, but HP paid the contractor's fees for services and her expenses -- there was a question about whether her services were actually provided.


Why didn't he just pay her out of his own pocket for services rendered and expenses?

He was a very competent CEO and very smart --- why would he do such a dumb thing over small change?

Also the woman involved seems to have submitted fraudulent invoices as a contractor to HP, if so then she is in real trouble.

What a mess

Interim CEO Cathie Lesjak said that although Mark Hurd was a "strong leader, at the end of the day, he didn't drive our initiatives -- it was the organization that supported Mark in driving those initiatives."

---- Ouch !


What happens with Palm now?

According to the WSJ this was a " hell hath no fury like-----" case.

No evidence of sexual harassment--

"The investigation began after an unidentified outside contractor revealed to H-P that she had had a close personal relationship with Mr. Hurd at a time she was providing marketing services to the company, said H-P general counsel Michael Holston in conference call with reporters.

The company said the probe revealed that Mr. Hurd had filed "numerous" inaccurate expense reports. The company didn't reveal the nature or amount of the inaccurate reports, but Mr. Holston said some payments made to the contractor were questionable.

H-P said the probe found there was no violation of the computer giant's sexual-harassment policy, "but did find violations of H-P's Standards of Business Conduct."Web Link

A bad day for marketing/PR contractors in the Valley--- today and for some time to come---

HP probably thought they could hush this up by canning Hurd on a Friday afternoon. Stock price is down 10% in after-hours trading. How bad would it have been if the news came mid-week?

Mark Hurd did turn the company around after the previous CEO almost ran the company into the ground. The stock price had been doing well (until today). Can they find someone competent to replace him?

Here is my vote for the next HP CEO-----

Ned Hooper, chief strategy officer and M&A chief at Cisco and potential heir apparent to Cisco CEO John Chambers.
Cisco has been grooming him for the eventual top spot, but the chance to run H-P–fast becoming one of Cisco’s largest competitors–could be irresistible.

Another ovderpaid executive unworthy of the power
which he feels make him above the law
guffaw guffaw
way to go HP! see if you can get somebody who
is able to right the ship.

Mark Hurd starts his career at HP with a wiretap scandal and ends with a sex scandal. Good riddance.

We do not have the full story--- the woman could have been a spy for China --- a black mailer, inside trader or just jealous-- we do not know-- yet.

Hurd will get a $40-50 million severance package and he created a lot of wealth for HPQ shareholders

Under Hurds 5 yr leadership Hewlett-Packard’s shares are up nearly 134%.
Compare that with the performance of the Nasdaq Composite which is up roughly 15% over the same period. The Nasdaq 100 was up about 29%. (A lot of that is Apple.)
And the S&P 500 tech sector is up about 18.5% during that period.(WSJ)

Regarding Hurds alleged behavior
I do not believe in hypocrisy.
He should he held to the same standards as national leaders like Bill Clinton, Barney Frank, and Charles Rangel.
These are beloved and respected leading figures of the ascendant political party in the United States, all of whom serve or have served in America's most august institutions.
That corporate leaders are not held to the same standard as these national leaders is not fair to either group.

How much tax break should Mark Hurd get on his $50M golden parachute (if he had been fired for cause, he would only get $27M)?

"The company said the probe revealed that Mr. Hurd had filed "numerous" inaccurate expense reports. The company didn't reveal the nature or amount of the inaccurate reports, but Mr. Holston said some payments made to the contractor were questionable."

Nice way of saying he was stealing money from HP and its shareholders. If Mr Hurd had found out a lower level person had done the same thing the person would have been fired and walked out the door. Special treatment just promotes more bad behavior.

The case is still a mystery--- in most cases where a CEO, who created as much wealth as Hurd has, the the BOD would forget about it, when Jobs got caught in back dating stock options-- Al Gore, who is on the Apple BOD, told the SEC to bury it and they did.

Something else is going on, industrial espionage, insider trading or blackmail by the woman involved is the received wisdom.

I imagine there will be a civil case from predatory lawyers and it will all come out in discovery.

Hurd can live happily ever after on just the interest from his wealth.

You said it! Hard to know what to believe really went on. Funny how Sharon is rushing to his defense by blaming the contractor.

It's funny, Mr. Sharon is twisting himself into dizzying shapes trying to blame the woman, or the democrats, or the Chinese, or whatever comes to his bias-poisoned mind.
Get a grip, sir. Mr. Hurd misbehaved, big time.

Just speculating...if Hurd had a long term relationship w/said contractor, predating her work for HP, then maybe resuming once at HP, it's easier to see not adhering to a higher code of professional behavior. Not acceptable, but somewhat realistic. Sticky wicket! Sheesh, look at former CEO golden boy whatshisname who went on to run Openwave. Naughty, naughty busy businessman!

What's Hurd's personal life like? Married, kids?

Were those pesky expense reports to cover up the affair? Perhaps he shoulda paid cash & not tried to expense it...

If the woman really was some kind of Russian sleeper agent, her name would be plastered all over the media by now. The reason HP is keeping her name quiet is that she really was the victim of some unnamed crime and HP is trying to minimize their liability. They've probably worked out some kind of settlement with her to respect her privacy in return for keeping quiet and not ruining the company reputation (even more). And the media has a general policy of respecting the privacy of sex crime victims.

Hurd is facing no criminal or civil charges, the claims of sexual harassment were discredited.
Did the woman file false and fraudulent invoices to HPQ?
If so she should be persecuted like Bill Clinton, Barney Frank---
Oh never mind.

Hurd is facing no criminal or civil charges, the claims of sexual harassment were discredited.
Did the woman file false and fraudulent invoices to HPQ?
If so she should be persecuted like Bill Clinton, Barney Frank---
Oh never mind.

Hurd is married. HP pays private school tuition for his kids, and pays his mansion at Atherton, in addition to his humongous salary/bonus/stock.

In the end, he is too cheap. It is his cheapness that brought him down.

Talk about cutting cost and controlling expenses. This guy is indeed an expert.

The "Honey Pot" and hacking are main means of espionage and industrial espionage in the world and in Silicon Valley.

Hurd is what he is, Wall Street loved him--- their is a mystery in this whole story-- if you are earning $27 Million a year why would you fudge on a $200 hotel room for your squeeze on your expense account?

Hurd is an expert on operations, logistics and costs-- seems very strange that he would forget his accountants pencil and low risk tolerance for nothing.

Sharon DOES bring up good possible theories on the honeypot scheme. Keeping the woman's name quiet may merely be in keeping w/HP personnel policy - it might include contractors as well as reduce likelihood for further legal action by the contractor.

It does sound like he was well hoisted by his own cheap n greedy petard.

I think the SJ Merc article is pretty interesting. Hurd sounds like a cagey player - little flash, a bottom line type of guy who'd do a lot to save a buck for the company or himself. Hah, the latter caught up w/him.

I understand Boxer will be needing a job soon.

Sharon's post above is taken -- verbatim; without attribution -- from the Wall Street Journal's article this afternoon. The following sentences are copied directly from the Journal (such sentences are posted to the Deal Journal report authored by Michael Corkery and Anupreeta Das; such report was posted by the WSJ at approximately 5:31 PM EST this afternoon):

Ned Hooper, chief strategy officer and M&A chief at Cisco and potential heir apparent to Cisco CEO John Chambers.

Cisco has been grooming him for the eventual top spot, but the chance to run H-P–fast becoming one of Cisco’s largest competitors–could be irresistible.

Attribution is a requirement, not an after-thought. Where did you, Sharon, learn to plagiarize?

Real sexual harassment is a serious issue---Hurd has been cleared of that--is the contractor an independent PR contractor? or does she work for a firm? if she works for a firm then she would have sued her firm for not protecting her from harrasment

This case is getting curiouser and curiouser -- there would seem to be no reason to not name the accuser-- has she left the country?
The issue of industrial espionage needs to be made more public in the Valley it is rampant and pervasive-- unfortunately

dropped link Web Link

It happens, the question is who is the best candidate,Hurd brought discipline to HPQ, now it need vision as it competes with Cisco, internal HPQ candidates are not a good prospect for most investors, the Palm deal is a big deal, maybe someone from VZW, anyway Hurd solved the operations and cost structure problems-- does HPQ need a visionary-- no--does HPQ need a deal maker? yes

Ah Hah! I got it, and I sympathize with Mr. Hurd.

Yes he earns a lot. But in reality he is poor. Whatever he earns is wired electronically to his bank accounts. Being the HP CEO, he really has no excuse to carry lots of cash in his pocket, or use a personal credit card.

And his wife, with servants and tutors taking care of everything and everyone in the household, has nothing better to do than scrutinizing every financial transaction in every account.

The money that Mr. Hurd can actually control personally with discretion, without being questioned by his wife, is almost zero!

So Mr. Hurd had no choice but to fake company expenses to cover his abnormal spending. What a poor man he was!

For those who weren't smart enough to sell your HP stock when Fiorina was in charge well I guess what goes around comes around. What a pity to watch a company built by Bill and Dave as a major force in creating computer software and hardware dump their values to sell printer ink. Too funny! Glad to see they are moving their operations out of Cupertino to a community that has also sold out on their values. Palo Alto and HP deserve each other.

@ Walter Wallis--

Carly is the one who will be unemployed come November.

Who was a better HP CEO, incompetent Carly or corrupt Mark? This is Mark's second scandal. Remember the wiretap scandal earlier in his CEO career?

Mercury-News report: Web Link

"But according to one source, the woman complained to HP that Hurd tried to pressure her into having sex by threatening to end her contract work for the company. The source, who spoke on condition of anonymity, said Hurd has acknowledged a friendship with the woman but denied having any sexual relationship or ever pressuring the woman about sex. Hurd has paid the woman an unspecified amount of money to resolve her claim, according to a person who has spoken with Hurd's advisers. The person described the amount as less than it would have cost Hurd in legal fees."

So, Carly Fiorina was fired by the Board for ineffectual leadership and some pretty big financial blunders.

The next CEO resigned amid pretexting and possible wire-tapping scandals...

The next CEO resigned over false and misleading personal expense reports and for failing to disclose a "conflict of interest" in a business sub-contractor relatonship (latter part not stated, but that seems pretty clear).

Are we seeing a trend yet?

In a nutshell, his conduct was NOT "The HP Way"

The HP "WAY".
I sure miss those free pastries twice a day.
On the other hand, didn't Carley get HP heavier into printers?

Sharon, I'm with you, but you forgotten (conveniently?) Mark Foley, Larry Craig, Glenn Murphy, Bob Allen, David Vitter, etc, all republicans.

As much as I despise corporate culture, I can excuse his golden parachute by his relative competence while CEO, but what was the excuse for Fiorina's, an exceptionally incompetent, obnoxious and clueless CEO who nearly ran HP to the ground?

What was Carly's severance package after she got fired?

Clearly the lesson from these cases is that men with high net worth need to be very careful about spending any time alone with women---

The woman's attorney in this case says no sex happened--

$20,000 in expenses is a rounding number-- something else may be going on-- industrial espionage-- attempts at insider trading--blackmail.

If the high net worth males are married with families they should be extra careful-- allegations can mean they loose at least 1/2 their net worth in divorce proceedings.

These cases really seriously harm single, young women in business.

Are these guys going to have record and video every interaction they have alone with a young woman?--- looks like they should-- or get an attorney witness-- every time-- that is the way it will be
HP took a hit of $10Billion -- for a while -- on this soap opera-- that is serious money that will attract sharks and bottom feeders in shoals.

The SEC and the FBI will be looking into who traded big between Glorias letter-- the attorney for the accuser -- and the Friday announcement which caused a big drop in HPQ share price.

Smells fishy--

Clearly the lesson from these cases is that women need to be very careful about spending any time alone with men with high net worth---since they're used to getting what they want when they want it & will try to fudge evidence.

In my youth I always believed the woman ( I had one of those "I believe you Anita Hill bumper stickers, silly me). After all, what woman would purposefully set out to destroy a man's reputation???

Silly me!!

At this point, so many women have completely lied for financial gain or revenge, from Anita Hill, to my now-ex sister in law, to that wonderful woman in the Duke not-rape case, I have concluded it is truly safer to assume innocence and make the woman PROVE her charges.

Pity. The older I get, the more cynical I am. Been duped too many time, I guess.

In the meantime, I make sure every man I know is taught to NEVER be "friends" with any woman, at work, church or volunteer work, and NEVER be alone with any female. Period.

Pity...I used to love and trust my "fellow women"..I no longer do.

I cannot believe all the blame the victim comments in this forum. Come on. Mark Hurd has confessed to HP's private investigators and even made a public statement. Are you calling him a liar?

What is the difference between Gloria Alred and a vulture? Very little.

As a former HP employee, I have zero sympathy for Hurd or his cronies. He is a common thief, pure and simple. And he walks away with $30M as a bonus for stealing.

If I was caught falsifying expense reports, I'd be walked out by security within the hour. Today, HP managers are supposed to pay from their own pockets for burgers for the usual summer employee picnics - because the company is facing "hard times" as per Hurd. They took away the bottled water, and the joke was that toilet paper would be next. And they still have the gall to talk "Uncompromising Integrity" at the rah-rah meetings - pathetic!

We need to figure out how to have proper checks and balances for large corporations and control the greed and entitlement that corporate execs feel as their birthright.

Press release from Gloria Allred and Jodie Fisher: Web Link

Apparently, she is not a Chinese spy as some people are claiming.

I second the last comment. The golden parachute for the last two HP honchos, Fiorina and Hurd, is indication of how wrong and morally corrupt corporatism is. Fiorina nearly ran HP into the ground through her sheer incompetence, arrogance and stupidity, yet was kicked out with tens of millions of dollars, and Hurd is nothing but an embezzler and liar who was rewarded with tens of millions instead of criminal charges. It's corporatism, not anything else that is the the most dangerous enemy of this nation.

The Business Insider asks if Mark Hurd is really the embezzler that the HP board of directors says he is, then whey is he getting any severance pay at all? Web Link

Reuters asks if the "The HP Way" is dead after the corruption of Carly Fiorina, Patricia Dunn, and Mark Hurd. Web Link

It turns out the woman in question is a 50 yr old, ex-adult movie actress---Jodie Foster

There is something else going on here, industrial espionage or insider trading or both.

SEC will investigate who benefited from the 10% stock price drop on Friday

Who knows who is lying? It could be either. Hurd didn't admit anything and there are slimy women out there who might want to take him down. Could even be a hired woman. Being CEO of HP, there are plenty of women who would jump into the sack with a rich/powerful man with no strings attached (i.e. Tiger Woods). Until audio tapes surface, I'm not convinced that she is the victim.

My husband takes the safest route, which is to never have a private business meeting with a female.There is always someone else who can join the meetings.

Jodie Foster, yeah right. Ha ha ha.

Sorry womans name is Jodie Fisher Web Link

I wonder how much she got paid? she will probably use the publicity to revive her dead adult movie career.

This gives me the creeps. I agree that this sort of thing makes honest hard working women with integrity have to work that much harder to be successful in the business world. How can you succeed when all the men with any sense are afraid to have a meeting with you? From what I've read about her 'job', it really sounds to me like this woman is pretty much an 'escort' looking to make some quick dough and get a burst of publicity for her flagging 'acting career'. Who knows what he actually did? I wouldn't defend him for lying to his company, or for sexually harrassing a woman in her job, but when her 'job' consists of exploiting the reactions she gets from men rather than any actual work, it's very hard to work up any concern for her when the men react.

Hurd is on the BoD of Newscorp, at least CEO Rupert Murdoch showed better taste when he upgraded his main squeeze.

The porn industry is close to organized crime--- Hurd had a body guard, how did Fisher get hired-- does HP do background/security checks?
Even to Google Fishers name would have disqualified her from access to any job above waiting tables in the cafeteria.

This whole thing sounds like a sting operation and honey pot trap by people who aimed at blackmail for money or espionage.

The result of this matter will be that NO male executive will ever be alone with any female employee or contractor or consultant for many years--- not if he wants to keep his job, reputation, marriage and fortune.

Boy was he dumb to get involved with her.
Maybe he did hit on her and she surely knew that he wasnt paying her that money to be competancy.
But really why did she have to sue him? She knew the score. She should have just said GO AWAY, and taken her overpayment and gone.

Now my HP shares are shot.

I dont feel sorry for M Hurd tho. He will be paid a packet and will be snapped up by any company you like.

It's really comical to listen to the male chauvinist pigs trying to blame the woman. She doesn't have to be Mother Teresa, but it is Hurd flew to various places to see her, she is an unimportant contractor. He paid for meals and accommodations,
he ADMITTED it.
Boys, get a clue. You sound like neanderthals.

Just shows you what happens when you go against the grain and try to refill the corporate cartridge with after market NCR ink.
Tends to spring leaks when you have "family values" at stake.

Now the contractor says she feels bad that he got fired and that she never intended that to happen. Oh really? How did she think it was GOING to end? She and Gloria Allred are looking for payday at someone else's expense, and they got it.

The reporting on this matter is limited, and leaves too many questions open. The whole mess does not pass "the smell test". How much money was involved in the "falsified" expense reports? If the dinner costs were in reason (maybe $100-$125 for two), this is not worth resigning over. If the costs for dinner were in the $$$, where was the corporate auditor?

Both parties claim that "no sex" was involved .. so where is the "foul"?

We'll never know what the back story is here, but it's clear that what HP has told the press to say is not really the reason that Hurd resigned.

Mr Sharon can't find enough villains to blame, maybe it's China, maybe it's an international plot, maybe it's an industrial plot.

The man couldn't figure out a way to keep his desires in check, and eventually forced her into retaliating.
Seems the old saying is true, that lots of men have their brains located in a funny place.

HP stock prices finishes down 7.4% on the first trading day after the scandal. After 3 scandalous CEOs in a row, is it time to give up on this company?

She's a hotty cougar on the prowl. She liked her chances with Hurd, who was attracted to her allures. This kind of thing happens all the time. What's the big deal?

Hurd's big problem was that he tried to cover it up by using the expense account.

The HP Board is being prissy. They should have kept it quiet, then moved on. Too late now, unless they get over their political correctness.

As a woman, I feel that this definitely will make it harder for women to work with men in the corporate envirnment. No winners in any of this....

If you read between the lines, it is not hard to figure out what really happened here. The woman was a professional hostess whose primary job was to butter up executives from other companies who were meeting with Mark Hurd. If you look at HP's list of corporate acquisitions in recent years, she must have been pretty busy and successful at her job.

The problem is that Marky Mark started playing games with her. He would hire her for an out-of-town meeting with another company, then cancel the meeting without telling her. She would fly out there and check into the hotel, only to find Marky, but not the other company. Maybe he would threaten to make her pay for the trip by herself if she wasn't nice to him. Maybe he threatened to cancel her lucrative gig altogether.

After the sexual harassment complaint, Marky Mark paid her a personal settlement, not using any HP funds. The amount was reportedly much less than the cost of defending a lawsuit, so it couldn't be too much. It was certainly less than the 8 figure severance package that Mark collected.

The big mystery that remains is why did HP pay Mark Hurd a severance package at all? If he is really guilty of the embezzlement and fraud that HP is claiming, then he should be fired outright with no severance.

The obvious answer for any person in an influential position is to never make yourself available for one-on-one meetings, drinks, breakfasts, lunches, or dinners. This greatly diminishes the risk of inappropriate behavior or misunderstandings. Once you do otherwise, you make yourself vulnerable.

A good cougar knows how to play a naive man. Old as man and woman (or Adam and Eve), and that is why we women have the ultimate real power. Marky was probably a hard worker all his life, chasing corporate titles and money, but he probably found it irresistable to ignore cougar's "talents".

Marky paid a big price for not having gotten laid, because most men who pay such a price at least scored. Marky was a double loser.

BTW, who's to say who set up those out-of-town meetings, HPQ? Cougar was smart enough to know that Marky could not resist a request by her to "consult" about an upcoming event in a far away city. One of the oldest game in the book.

OK, I am having a little fun with this! Might as well, cuz there ain't any real winners here.

Just because he said (and she said) that nothing happened doesn't really mean that nothing happened. Mark's settlement payment to the woman probably came with a big "shut up" clause. And HP's severance payment to Mark probably has a similar clause.

It's interesting the high ethical standards employed by HP resulting in the firing of Hurd.

But when it comes to drunken PAPD officers arrested and convicted of DUI's the Palo Alto city council including the police chief closes their eyes to this scandal allowing them to remain on the force.

What kind of standard is this?

HPQ,

Hush money can mean a variety of things. Maybe Marky didn't want his wife to find out. Cougar no longer was burdened with a husband, so she had the leverage.

2 of a kind. Sell sell sell, HPQ will drop 20% manana.
Oracle Sun will eat their lunch.

You see the photos of Jodie Fisher? Fake blonde, fake breasts, an actress, hostess at executive events, Gloria Allred client. She's an opportunist who wants fame.Spitzer's hooker has a career (advice column) now due to her fame. Fisher's 50 years old; it's her last chance at making it big. She knew exactly what she was doing and Hurd ate the bait.Unless he wanted out and they planned this together. All we need is some "friends" of hers who are fame-seekers to speak out re her integrity.

Surely Gloria Aldred is a distinguished legal scholar only focused on the pursuit of justice for all, not on grubbing for cheap publicity!

Gloria avoids media coverage if at all possible. She does not take any legal fees whatsoever for representing clients seeking justice. Instead she devotes all her time to the pursuit of truth, justice, and the American Way. She may look, act, and sound like The Wicked Witch of the West, but she is in truth a shy, modest advocate for the oppressed.

We should all be proud that our law schools are producing selfless saints like Ms. Aldred.

Does anyone believe Bill or Dave would have kept Mark Hurd
after this? I don't think so.

Regardless of the motives of Fisher or her attorney, AlLRED, not Aldred, HURD is the one who ducked fup. HE falsified expense reports. HE admitted it. If his integrity was impeccable, it wouldn't have happened. No matter our theories - industrial espionage w/a honeypot, a greedy woman out to make her last big financial stand - HURD is responsible for his own behavior in this. I bet if he was innocent of falsifying documents, he wouldn't have admitted it. His supporters have been ignoring his culpability.

The HPQ found the allegation of sexual harassment as false
Hurd did not prepare his own expenses, mistakes were made and he paid the difference.
A responsible BoD would support Hurd, give him a caution and demand a succession plan-- they could have made a conditional contract based upon this and saved HPQ investors $ 8.5 billion.
[Portion removed by Palo Alto Online staff.]

[Post removed by Palo Alto Online staff.]

The plot thickens

HP has now fired the person who hired Fisher

"Caprice Fimbres McIlvaine, formerly head of internal communications at Hewlett-Packard (HPQ) and a top aide to ex-CEO Mark Hurd, has left the company, following her boss out the door three days after his departure.
Her exit is significant because, according to two people with knowledge of her former role, McIlvaine was the key conduit in hiring Jodie Fisher, the actress-turned-corporate hostess/"marketing contractor" who later filed a sexual harassment suit against Hurd, setting in motion the chain of events that resulted in the CEO's resignation on Aug. 6. McIlvaine resigned effective Aug. 9, HP confirmed Wednesday.

McIlvaine occupied a unique role at HP. Originally hired to work in the company's corporate communications group, she ultimately rose to head internal communications for the company as well as serving as something of a chief of staff to Hurd.
She typically was one of the few people who accompanied Hurd on trips away from company headquarters, arranging meetings, lodging and the like.Web Link

[Post removed by Palo Alto Online staff.]

HPQ is not alone-- the double dip recession is real

Cisco stock plunges 10 percent after CEO sees 'unusual uncertainty'Web Link