Mark Hurd 311.
(photo credit: Associated Press)
Hewlett-Packard lost nearly $10 billion in value after CEO Mark Hurd resigned Friday for allegedly falsifying expense reports to conceal a romantic relationship.
During Hurd's five-year tenure, HP's stock doubled in value as he transformed the 71-year-old company from one hooked on printer cartridge profits to a major player in technology services that looks a lot like arch-rival IBM Corp. Shareholders did not take the news well, sending HP's shares tumbling 9.7 percent.
The disputed expenses were said to be worth between $1,000 and $20,000 in value each, according to an anonymous source with knowledge of the case.
The company said it learned about the relationship several weeks ago, when the woman, who did marketing work for HP, sent a letter accusing Hurd, 53, and the company of sexual harassment. An investigation found that Hurd falsified expense reports and other financial documents to conceal the relationship. The company said it found that its sexual harassment policy wasn't violated but that its standards of business conduct were.
"The facts that drove the decision for the company had to with integrity, had to do with credibility, had to do with honesty," said HP general council Mike Holston, declining to elaborate.
Hurd marks the second CEO to leave amid controversy at HP in recent
years. Former CEO Carly Fiorina left after her decision to acquire
Compaq Computer and an ensuing upheaval over her personality and her
The divisive Compaq deal proved
instrumental in HP's ascendance under Hurd. Though their underlying
stories are very different, Hurd's departure is like Fiorina's in one
key way: Both were forced out with the company about to reap the
benefits of sweeping changes they made at the Silicon Valley
Hurd is departing after cutting tens of thousands of
jobs and launching an expensive expansion, including the $13.9 billion
acquisition of technology-services provider Electronic Data Systems, the
$2.7 billion takeover of computer-networking equipment maker 3Com Corp.
and the $1.4 billion deal for mobile phone maker Palm Inc.