Now that everyone has gotten over the shock of HP CEO Mark Hurd getting ejected on an August Friday afternoon–with the timing of the announcement obviously chosen to minimize bad PR–people are looking more closely at the details.And the details leave big questions as to what really happened.
Some, including Larry Ellison, are suggesting that Hurd was fired because HP’s board was too wimpy to weather the bad publicity that would accompany a bogus sexual harassment lawsuit. And the facts certainly fit that story.
As of yesterday afternoon, HP was (mostly) sticking by its guns:
Hurd was ousted, the company told us, because HP found:
“numerous instances where [Hurd’s love interest, Jodie Fisher] received compensation and/or expense reimbursement where there was not a legitimate business purpose, as well as numerous instances where inaccurate expense reports were submitted by Mark or on his behalf that intended to or had the effect of concealing Mark’s personal relationship with the contractor.”
And that sounds awful. In starker terms, HP says that Hurd embezzled company money to pay his companion and defrauded the company to hide his own behaviour. If Hurd really did those things, he should have been instantly sacked for cause, with no severance whatsoever.
But he wasn’t.
Instead, he was allowed to resign. And he will walk away with something on the order of $40 million in severance to ease his pain. CEOs who steal money and defraud their companies do not get severance payments–they get fired. So it seems as though HP’s evidence to back up its findings is hardly conclusive.
What’s more, Hurd’s people have basically denied both of HP’s allegations above. Specifically, they say they are aware of only one instance in which Jodie Fisher’s expenses were paid for on a trip that did not involve working–and they say that this happened because the event Fisher was supposed to be running was canceled at the last minute. They also suggest that Hurd’s inaccurate expense reports contained merely small and inadvertant mistakes–omissions of names, incorrect attendees at dinners, etc.–and that some of the expense reports DID list Jodie Fisher‘s name.
Lastly, the language above includes some qualifying language that raises the possibility that Hurd was not intending to deceive HP with his expense reports (“innacurate expense reports were submitted by Mark or on his behalf that intended or had the effect of concealing Mark’s personal relationship with the contractor.”**
The expense reports “had the effect of concealing” Mark’s relationship with Jodie Fisher–which did not involve embezzlement, which both sides have said wasn’t a sexual relationship and which, HP concluded, did not violate HP’s sexual harassment policy? That sounds pretty thin.
And that last bit is the real kicker: Hurd was sued by Jodie Fisher for sexual harassment, but HP’s investigation found no evidence that HP’s sexual harassment policy had been violated. This suggests that Jodie Fisher’s lawsuit was bogus–or, at least, that there was no evidence to back it up.
Lastly, the New York Times revealed this morning that, before Hurd was ousted, HP’s PR firm terrified the board with scare-stories about how the sexual harassment lawsuit (true or false) would torment the company with awful PR for months. And given the attorney behind the lawsuit, attack dog Gloria Allred, this would not have been hard to believe.
So why was Hurd ousted, exactly? And why was he allowed to resign instead of being canned?
Based on the evidence that has been released to date, the most likely scenario seems like the following:
1. Mark Hurd spent some quality time with Jodie Fisher, some of which was on the company’s dime. He developed a crush on her or she developed a crush on him, and the feeling was, initially, mutual.
2. Someone–Mark or Jodie–wanted the quality time to progress to a full-blown love affair. For whatever reason–perhaps because the lust was, at some point, unrequited–it did not.
3. Jodie Fisher stopped getting consulting assignments from HP and stopped having quality time with Mark. This likely happened either because 1) Mark decided a quick romp the relationship wasn’t worth risking his job and/or wrecking his marriage over or 2) because Mark had realised he wasn’t going to get lucky and moved on or 3) because Jodie Fisher suddenly felt uncomfortable in Mark’s presence.
4. Sometime thereafter, Jodie Fisher concluded that “sexual harassment” had occurred. (Because her love was unrequited and she was obsessed and disappointed? Because Mark demanded consulting services that she didn’t want to provide? As yet, we don’t know.)
5. Jodie threatened to sue Mark for sexual harassment.
6. HP’s board freaked.
7. HP’s board investigated the sexual harassment claim and found… nothing. But…
8. HP’s board was still terrified of the bad publicity that would ensue when Fisher’s attorney, Gloria “Pit Bull” Allred, went on all the talk shows raving about what a horrible sex predator their CEO was and how he had demanded an innocent single mother do all sorts of heinous things and then fired her when she didn’t.
9. HP’s board, thankfully, found some inaccuracies in Mark’s expense reports, which they realised they could use to oust him–and, thereby, conveniently, avoid the bad publicity above.
10. HP’s board concluded that the inaccuracies did NOT constitute obvious proof of fraud or embezzlement and that it was worth $40 million in severance not to have Mark Hurd sue the company for wrongful termination. And they therefore demanded his resignation instead of firing him.
That, in our opinion, is the most likely story of what happened here.
Now, none of this is to say that Hurd wasn’t a reckless idiot. Any dynastically wealthy CEO who lingers over long intimate dinners with subordinates is rolling the dice, no matter where the relationship goes. If Hurd didn’t get that at the time (which he should have), he surely does now.
(Not quite accurate? Please send more details on background to [email protected]. And we’d love a copy of the sexual harassment lawsuit, too, if you have it handy…)
**The original version of this post said that HP’s description of Hurd’s transgressions had changed slightly since Friday afternoon. This was based on the language in Friday’s press release. HP has notified us that the language is exactly the same as the language the company used in Friday’s follow-up conference call. We regret the error and have updated the post.
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