August 9, 2010
The recent story of the resignation of Hewlett Packard CEO Mark Hurd has plenty to attract the media: big money, a blond actress, allegations of sexual harassment, and admissions of a lapse of ethics. The short version is that Hurd often dined in the company of Jodie Fisher, an HP marketing consultant who later accused him of sexual harassment. Those allegations were investigated and debunked by HP's Board of Directors. But as in many scandals, it was the cover-up that brought down HP's CEO. Inaccurate expense reports submitted by Mr. Hurd were the catalyst for his resignation. I presume that "inaccurate" means at least misleading, and that "resignation" means jump-or-we'll-push-you.
That's too bad for Mr. Hurd, who by all accounts had an otherwise stellar career at HP and elsewhere, and it's too bad for HP, which has prospered under his tenure. But we will now get to see if HP will do as well with a new leader, and this is a good opportunity to question whether tens of millions in compensation is absolutely necessary. One thing that is necessary is the highest standard of corporate ethics. If you have the job as captain of the ship and expect millions in return, you owe your shareholders nothing less.
GTC
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