Did HP Put A Hit On Mark Hurd?

Former insider says board was increasingly concerned about CEO's management style, excessive bonuses, and employee morale.

Paul McDougall, Editor At Large, InformationWeek

August 11, 2010

3 Min Read

HP's board fired Mark Hurd not because he fudged expense reports or engaged in an inappropriate relationship with a blonde marketing contractor, but because he was alienating employees and running company morale into the ground.

That's the opinion of Stanford scholar and longtime Hewlett-Packard watcher Chuck House, who spent 29 years at the legendary Silicon Valley technology purveyor.

The official reasons for Hurd's departure—that he filed misleading expense claims to cover up get-togethers with former soft core porn actress Jodie Fisher—are just red herrings, said House, in a blog post Tuesday.

"All bogus, in my view," wrote House. "This guy was a thug, nicknamed Mark Turd by ex-HPites who worked directly for him—stories that have circulated in the Valley for three years," said House, who currently runs Media X, Stanford's Industry Affiliate research program on media and technology.

House said Hurd "raped" HP employees "by eliminating the sixty-five year concept of profit sharing, preferring to move to obscene bonuses for himself and his five top minions—a mere $113 million payout for them in a year he chopped everyone else's pay by 5% plus profit sharing," House wrote.

The beginning of the end for Hurd may have come when an internal survey that HP calls Voice of the Workplace showed in April that 66% of all HP employees "would quit tomorrow if they had an equivalent job offer," said House, an IT industry veteran who helped lead Veritas' IPO and is a former ACM president.

"There's lots more to 'worry about', and it is easy to imagine that the HP board was worrying about all of them, but didn't know where to 'pin the blame'. This 'non-sexual' harassment was simply a convenient foil," House claimed.

But Hurd, who's said little publicly about his dismissal, isn't without supporters. Oracle CEO Larry Ellison said Hewlett-Packard erred greatly when it fired Hurd, who's credited with boosting HP's presence in enterprise software and services through a series of bold acquisitions.

"The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," Ellison wrote, in an e-mail Monday to The New York Times. "In losing Mark Hurd, the HP board failed to act in the best interest of HP's employees, shareholders, customers, and partners," said Ellison.

Jobs was fired as the head of Mac engineering at Apple in 1985 amid tension with then-CEO John Sculley, before returning years later to resurrect the company.

Ellison also implied that HP's board may have simply used Hurd's relationship with Fisher as an excuse to get rid of him—but not because he was unpopular, as House claimed, but because he was reportedly in the middle of negotiations for a lucrative new contract.

"Publishing known false sexual harassment claims is not good corporate governance, it's cowardly corporate political correctness," Ellison wrote.

HP stunned the tech industry Friday with the announcement that Hurd, 53, was out. The company said an investigation by outside legal counsel and its own General Counsel's office found that Hurd did not violate its sexual harassment policies, but broke the company's Standards of Business Conduct rules.

HP appointed CFO Cathie Lesjak, 51, as interim CEO while it carries out a search for a full-time replacement for Hurd.


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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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