Mark Hurd Departs HP: Market-Watchers Weigh In
Since Hewlett-Packard's CEO Mark Hurd stepped down Friday, speculation has whirled about on everything from how the company will fare without him to how many millions he'll reap in severance and other perks and the exact details leading to his departure, after HP said he had falsified expense reports to conceal a relationship with a female contractor, who accused him of sexual harassment.
Due the the scandal's fallout, the stock has plummeted since Friday. On Monday, one analyst recommended it's a good time to acquire HP stocks to take advantage of the company's temporary weakness.
To learn about the stories behind the headlines, read on:
Mark Hurd is walking away with severance and other grants worth an estimated $34.5 million—a number that could rise to more than $40 million, according to compensation experts.
Along with $12 million in cash severance, Hurd gets to keep $8.9 million in stock options, $12.7 million in performance-based stock units and, more than $600,000 in restricted stock units, according to James F. Reda & Associates, a provider of independent compensation consulting to boards of directors and top-level management.
Compensation experts see Hurd's total package rising to more than $40 million. That's because the company's fiscal year performance and a rising stock price into September will boost the value of Hurd's options and performance-based stock units.
Whatever the number, it's still more than Hurd's pay last year of $30 million, which put him among the 10 highest paid CEOs for 2009.
The events were billed as CEO executive summit meetings, exclusive gatherings, often lasting several days, where Hewlett-Packard officials wooed top customers.
When Mark Hurd appeared at them, he sometimes relied on Jodie Fisher, a 50-year-old former reality television contestant turned HP marketing consultant, who would introduce him to customers and keep him company.
Hurd’s relationship with Fisher, which led to his ouster last week, has put an unsavory end to one of the great executive runs in recent American business history. And it has stunted a long search by HP's employees for stability and pride at the patriarch of Silicon Valley companies.
HP's top executives on Sunday said they would no longer discuss Hurd’s situation and vowed to find a new chief executive to keep the business running smoothly. “We are not going to slow down one bit,” said Cathie Lesjak, the chief financial officer and interim chief executive.
Analysts had come to view Hurd as a stabilizing presence who galvanized the formerly chaotic company, and as the glue that held a complex organization with more than 300,000 employees together.
Current troubles at Hewlett-Packard—which caused the stock price to fall more than 7 percent Monday—present a good opportunity for investors, an analyst told CNBC Monday.
“This is a strong company in a strong industry. This is a growth company that will be spending money,” said Mark Stahlman, president of TMT Strategies. “Investors should take advantage of weakness here.”
Stahlman said Hurd's departure is no big loss for the computer and printer maker.
“This is hardcore Silicon Valley technology growth people who really run this company, not Mark Hurd,” added Stahlman.
Accuser of Hurd Steps Forward
The female contractor whose sexual harassment accusation against Mark Hurd led to his ouster as chief executive of Hewlett-Packard came forward on Sunday, saying she never intended for Hurd to lose his job.
The woman, Jodie Fisher, revealed her identity for the first time through a statement released by her attorney, Gloria Allred. "I was surprised and saddened that Mark Hurd lost his job over this," she said. "That was never my intention."
Fisher is former salesperson and has appeared in movies and TV shows, most recently the show "Age of Love" on NBC.
Fisher told HP's board in June that Hurd had sexually harassed her, but an investigation found no violation of the company's sexual harassment policy.