Issue of the week: Why did HP’s Mark Hurd resign?

last updated 8 January 2015

It doesn’t add up, said Henry Blodget in BusinessInsider.com. The more the Hewlett-Packard board of directors tries to explain why it demanded CEO Mark Hurd’s resignation last week, the more mystifying his abrupt departure becomes. Here’s what we know: Hurd dined occasionally with Jodie Fisher, an outside contractor who helped make introductions at HP events where Hurd would meet and greet big customers. Both deny that they had a sexual relationship, but something happened between them; Fisher sued Hurd for sexual harassment. Hurd quietly settled the suit, but Fisher’s lawyer, Gloria Allred, brought the matter to the board’s attention. After an investigation, the board concluded that Hurd had not committed sexual harassment, but had submitted fraudulent expense reports to conceal his “close personal relationship” with Fisher. Citing Hurd’s “profound lack of judgment,” the board said he had to go, yet it signed off on a $28 million severance package. If Hurd defrauded HP, then he should have been dismissed without “a dime of severance.” What is the board not telling us?

There’s no mystery, said Dean Takahashi in Venturebeat.com. Jodie Fisher would give any image-conscious board the vapors. When she was in her 30s, “the 50-year-old former reality television contestant” had appeared in several soft-core porn movies with titles like Intimate Obsession, Body of Influence, and Sheer Passion. Imagine the “embarrassment if the whole industry found out Hurd was accused of sexual harassment by a former soft-core porn actress.” Given HP’s recent succession of controversies and scandals, the board had especially good reason to be skittish, said Ashlee Vance in The New York Times. “Hurd’s flashy predecessor” Carly Fiorina is best remembered for being ousted in a boardroom coup following HP’s “contentious acquisition” of Compaq Computer in 2002, which was generally viewed as a disaster. Four years later, Chairwoman Patricia Dunn resigned in disgrace for her part in “a corporate espionage debacle in which HP was found to have spied on reporters, its board members, and employees.” The company simply couldn’t take another scandal. Hurd had to go.

Still, there’s something baffling about the whole “tawdry” business, said Scott Duke Harris in The San Jose Mercury-News. The “stolid” Hurd, a 53-year-old married father of two and a “button-down manager who prized efficiency over flair,” is the last person anyone would expect to star in a sex scandal. He had led an amazing turnaround at HP, which recently surpassed IBM as the world’s largest technology company—with $120 billion in revenue and annual profits of $27 billion—and he had succeeded in restoring the company’s tarnished reputation. For a while.