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Summary:

Hewlett-Packard said today that Chairman, CEO and President Mark Hurd has resigned his positions following an inquiry over a sexual harassment claim. HP’s press release led with the scandal, but also noted that the computing company has raised is revenue expectations for the year.

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Former HP CEO and Chairman Mark Hurd

Updated: Hewlett-Packard said today that Chairman, CEO and President Mark Hurd has resigned his positions following an inquiry over a sexual harassment claim made by a former contract employee. HP’s board has named CFO Cathie Lesjak as CEO on an interim basis. HP’s press release led with the scandal, but also noted that the computing company has raised its non-GAAP earnings and revenue outlook for the year. From the release:

Hurd’s decision was made following an investigation by outside legal counsel and the General Counsel’s Office, overseen by the Board, of the facts and circumstances surrounding a claim of sexual harassment against Hurd and HP by a former contractor to HP. The investigation determined there was no violation of HP’s sexual harassment policy, but did find violations of HP’s Standards of Business Conduct.

Hurd said: “As the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career. After a number of discussions with members of the board, I will move aside and the board will search for new leadership.

This is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time. I want to stress that this in no way reflects on the operating performance or financial integrity of HP.”

This isn’t the first time in recent memory HP’s executives have faced a scandal. In 2006, the company was accused of obtaining illegal access to journalists phone records while it investigated a leak on its board. HP said it has formed a search committee consisting of Marc L. Andreessen, Lawrence T. Babbio, Jr., John H. Hammergren, and Joel Z. Hyatt, which will oversee the process for the identification and selection of a new CEO and Board Chair.

And to toss in a bit of good news, HP pre-announced its third quarter revenue of approximately $30.7 billion, which is up by 11 percent compared with the prior-year period.

Update: It also said it expected annual sales between $125.3 billion to $125.5 billion, which were up a smidgen from its expectations announced in May during its second quarter financial results call of 2010 revenue of between $123.8 billion and $124.9 billion.

Update: According to employee tracking service, Glassdoor.com,  “Hurd has a 66% Disapproval Rating and only a 34% Approval Rating, based on feedback from more than 1,000 HP employees. “

What the media is saying:

The Financial Times: One person familiar with the situation said that HP had identified questionable expense claims of up to $20,000 over the past two years. Another person close to Mr Hurd said that his relationship with the female consultant had involved a friendship, and that there had been no romantic connection.

Larry Digan of ZDNet: Who will be HP’s next CEO? The big question is figuring out who fits that bill. HP can be expected to cast a wide net. Remember HP plucked Hurd out of NCR, where he was known for strong operating skills, but wasn’t nearly as flashy as Carly Fiorina before him.

WSJ: Top ten candidates to replace Mark Hurd.

  1. Carly, no!

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  2. Todd would be a great choice!

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  3. Stacey, Good post and links. Mark Hurd is operational genius but not a technology strategist who can lead HP into future battles with apple and others. I have a feeling that he is intellectually behind others in the senior executive team. The board found a good ethics violation to get rid of him. Todd Bradley will take the CEO spot eventually.

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  4. [...] should have been subject of Harvard Business School case study. Instead, he left under a cloud of doubt, with a somewhat sullied reputation, in an all-too familiar tale of hero-today-villain-tomorrow, [...]

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  5. [...] HP was in the bidding for 3PAR as well, but likely could not move quickly enough with other short-term priorities on its [...]

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  6. [...] some time off from trying to duck the muck flying around in the wake of ex-CEO’s Mark Hurd’s ignominious exit to make a $1.6 billion dollar bid for Fremont, Calif.-based storage company, 3PAR.  That’s [...]

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  7. [...] this year. From my perspective, the funding rounds, product releases, acquisitions, IPO filings and corporate scandals didn’t take a vacation. Perhaps there were fewer tech conferences in August, but it’s [...]

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  8. [...] CEO, Mark Hurd, alleging breach of contract and potential misappropriation of trade secrets. Hurd left the company under a cloud last month, after allegations that he was involved in a number of improprieties related to a human resources [...]

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  9. [...] Oracle. According to a joint statement out today from both companies, HP and Hurd have settled. HP canned its CEO in August after it discovered “violations of HP’s Standards of Business Conduct” while [...]

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  10. [...] for next year. I’m not saying the handset business is doomed. And to be honest, between the CEO turmoil and the integration work, there’s a lot on HP’s plate. It hasn’t helped that [...]

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