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Hewlett-Packard Co.’s Mark Hurd resigned as chief executive officer after an investigation found he had a personal relationship with a contractor who received numerous inappropriate payments from the company.
Chief Financial Officer Cathie Lesjak, 51, will take over as interim CEO. While an investigation didn’t find a violation of the company’s sexual-harassment policy, Hurd “demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP,” General Counsel Michael Holston said.
Shares plunged 9.3 percent in late trading after the announcement.
The departure leaves Hewlett-Packard, the world’s biggest maker of personal computers and printers, in search of a new CEO and chairman after more than five years under Hurd. On his watch, the Palo Alto, California-based company regained leadership in the PC market from Dell Inc. and used acquisitions to expand into new areas, such as computer services. The company’s stock-market value increased $44.6 billion, rising to $108.1 billion, since Hurd took the helm on April 1, 2005…
HP initiated the investigation on June 29 after the contractor made a claim of sexual harassment. The woman, who HP declined to identify, worked on marketing tasks for two years, the company said. The probe found violations of HP’s standards of business conduct, though it didn’t find violations of the harassment policy.
Hurd submitted receipts for expenses ranging from $1,000 to $20,000 over two years, including meals and travel, that should have been labeled as personal and not related to business, said a person familiar with the situation. Hurd, who is married and has two children, intends to pay the company back the entire amount.
Hurd will get a severance payment of $12.2 million, plus other benefits; so, don’t worry too much about whether or not he can afford his country club membership.
Hurd is also on the board of News Corp.
Which will give Ol’ Rupert a chance to moralize. Or not.