HP To Probe Mark Hurd's Severance Payout
Investigation is in response to shareholder claims that former CEO's $40 million golden parachute was excessive.
The board of directors at Hewlett-Packard has launched an investigation into the circumstances surrounding the departure of former CEO Mark Hurd, who was ousted last year amid allegations of an improper relationship with a female contractor but still initially walked away with severance of more than $40 million.
HP disclosed the probe in papers filed in federal court in San Jose on Jan. 14. In its filing, HP said the investigation is in response to shareholders demands that the company justify the size of the payout. A number of shareholders have sued HP, alleging that Hurd's severance package was excessive.
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Hurd's severance pay was reduced as a result of a settlement that arose after HP challenged the legality of Hurd's decision to accept the job of co-president at rival Oracle following his dismissal from Palo Alto.
But some investors claim Hurd was owed nothing because it was his own behavior that led to his removal from HP's top job. HP has characterized Hurd's relationship with blonde marketing contractor and former B-movie starlet Jodie Fisher as inappropriate. It also raised questions about Hurd's expense reports.
Federal securities regulators also recently launched an investigation into the circumstances that led up to Hurd's departure from HP, and are particularly focused on whether Hurd leaked details of a confidential plan to acquire outsourcer Electronic Data Systems to Fisher. Hurd has denied any wrongdoing.
During his tenure at HP, Hurd was credited for boosting the company's profits and market share in PCs and other tech equipment and increasing its presence in key markets such as IT services, but he was also widely criticized by employees for cutting salaries while top executives saw their bonuses increase.
Hurd was named co-president of Oracle in September.
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