No choice but to remove Hurd
Q: In forcing out its successful chief executive, Mark Hurd, did Hewlett-Packard directors over-react to what, given his overall compensation, appears to be a modest abuse of his expense account? Or did the board under-react by allowing Hurd to resign with his full contracted severance package rather than firing him for cause?
The Hewlett-Packard directors were faced with a Hobson's choice. They had one of the most talented and successful CEOs in the country. They also had a CEO who had misused company funds on a questionable personal relationship and in flagrant violation of an ethics code for which he was responsible. As much as they may have wished to retain him it is impossible to see how they could have done so without severely undercutting his ability to lead and the corporation's reputation. Disruptive as his forced resignation may have been, it was the right course of action and was taken promptly. But to have attempted to deny him his contractual severance would not only have been vindictive, but would have prolonged the agony and would have almost certainly have resulted in protracted litigation.
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