This past week, Hewlett Packard fired their golden-child CEO Mark Hurd–no, he “resigned”– with a $28M diamond-studded golden parachute. Why? Some CSR experts will say it was the responsible thing to do. You could also say the simmering sexual harassment scandal had something to do with it (you think?!). And, a $28M payoff–um-“severance”–may be pocket change when considered in context.
HP executives were quick to point out that Hurd’s leaving the HP herd should not be heard as having anything to do the the business health of the company. No, quite the opposite. Previous news led one to believe Hurd was being heard as key to the HP solution for all that ailed them. So, why the quick exit?
As a communications professional, I have to see this through Investor Relations and Crisis Management eyes. Every penny movement in HP stock is worth around $10M in valuation. The 8% drop in stock price (around $9B) in after-hours trading following the resignation had to be viewed by HP as short-term collateral damage compared to the potential damage caused by a protracted scandal. And, HP has been there before.
Remember the 2006 scandal in which Chairwoman Patricia Dunn was forced out for overseeing an investigation that involved spying on reporters’ and directors’ phone records to suss out the source of leaks to the media. Well, the head of HP PR told me at that time that around 2,000 negative stories swirling around that fiasco eroded a half century of HP goodwill. HP is not interested in letting this Hurd thing create a stampede of the investor herd.
I see the stock rebounding at end of day today, which is a good sign – if questions regarding the board’s fitness don’t begin stealing headlines over the coming weeks.
Was Hurd Ousting Justified?
- Yes (100%, 2 Votes)
- No (0%, 0 Votes)
Total Voters: 2