HP Boss Joins Former David Jones CEO After Female Complaint

Credited with reinvigorating Hewlett-Packard Hurd, the 53 year old CEO of HP has also been of “lacking judgement”. Michael Holston, H-P’s general counsel, said Mr. Hurd demonstrated a “profound lack of judgment that seriously undermined his credibility and damaged his effectiveness.”

Hurd stepped down following an investigation into his relationship with a female contractor whose services to HP are being questioned. The woman is believed to have done contract work for HP in Australia.

The Wall Street Journal said that Hurd, didn’t violate the company’s policy regarding sexual-harassment but submitted inaccurate expense reports that were intended to conceal what the company said was a “close personal relationship” with the woman.

The amount of money in question wasn’t disclosed. The woman wasn’t identified but was described as an outside marketing contractor for H-P between mid 2007 and mid 2009.

HP’s shares plunge 8.3% to $42.48 in afterhours trading following the announcement .

The issue exploded after the woman’s lawyer sent a letter alleging sexual harassment to Mr. Hurd’s office on June 29. Mr. Hurd turned the letter over to the company’s legal department and the board was informed the next day, according to the WSJ.

The resignation is “all about Mark’s behaviour and judgment” said Cathie Lesjak, H-P’s chief financial officer, who will assume the CEO role until a permanent replacement for Mr. Hurd is found.

Questions have also been raised as to whether the woman’s Company contractor provided all the services she was paid for. “There are “a couple of instances where that was in question,” Mr. Holston said.

The WSJ said that according to a person familiar with the situation, Mr. Hurd flew to Los Angeles to personally interview the woman for the contractor marketing position, which this person deemed unusual for the CEO. In September 2007, Mr. Hurd flew to Denver for a second interview with the prospective hire at the company’s expense, said this person.

The contractor worked for H-P on events world-wide over the ensuing two years, and was typically paid $1,000 to $5,000 in expenses for each event, this person said.