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.