Shareholders sue HP over Hurd's sex scandal probe

HP faces a lawsuit over the departure of Mark Hurd from shareholders angry at the massive payoff he received and accusing the board of failing in their legal duties. Hurd was allowed to resign as CEO last week after an investigation into sexual harrassment allegations uncovered false expenses claims. He walked away with a $12. …

[Anonymous Coward]

Litigation

I suppose it was bound to happen in the home of litigation and confrontation. However as an ordinary punter I can see reasoning behind taking this action. If investors put their money into a company (any company) and the leaders of that company took an action which adversely affected the company share price then those at the top should reasonably be held accountable - I would have thought. It might even amount to fraud, as it would be taking money on false pretences.

To be honest it would be good if the Dolly the Sheep cloners could do a job on Hewlett and Packard and bring them back to run the outfit. It's not the same company as it was 20+ years ago, they seem to have a problem putting people into the top job.

[Ancient Oracle funkie]

Shouldn't titles be accurate?

If so, it wasn't a sex scandal, it was the more petty offence of fiddling his expenses. I'll leave it up to others to speculate on how much more he'd have had to fiddle before it became a sex scandal.

[Anonymous Coward]

getting paid $12 million for doing a bit of sexual harrasment

I've always wondered how that works, how do these people get paid to leave where anyone else would have been marched out the door in disgrace..

If anyone can explain to me how come these directors/ceos/bigcheeses get paid phenomenal amounts of money despite all their fuckups, i'd be most grateful, it just doesn't seem to make sense.. is it as simple as the fact that they make the rules? -are they not accountable to anyone?

-and how come they tend to get hired again by someone else shortly after to do exactly the same thing all over again.. if your average pleb gets fired fired for incompetence or something as nefarious as sexual harrasment it tends to be detrimental to future employment, not to mention you don't get paid to leave.

[Chris Miller]

It's down to the contract

These people are not on the same employment contract as a typical employee. Basically, if the board are stupid enough* to have signed a contract that entitles someone to 18 months pay on termination, irrespective of the reason, then that's what they have to do (or fight it out in the courts, which will probably cost more).

* and most of them are that stupid - anyway they're all on the same type of contract themselves and can't see anything wrong with it.

[Arctic fox]

Yes, but......

......the interesting thing with so many of these situations is that even though where the company concerned (whoever/whichever it may be) might be thought to have very good (and legally watertight) grounds to sack *without* compensation, they choose not to do so. I do not think that we have to be unduly cynical in wondering whether there is some kind of "gentleman's agreement" involved in these situations - the kind of "understanding" that we mere mortals would call a "thieves bargain".

[Destroy All Monsters]

In which case the shareholders, as proprietors of the company, would sue...

...like now.

[Arctic fox]

Yes indeed.......

....I was very pleased to see that news. It is about time that shareholders REALLY understood that their interests and those of the senior management/directors in the company concerned are usually not the same and very often in direct conflict. We have often seen in recent years the managerati downright pillage companies to enrich themselves whilst conning the shareholders into accepting this by claiming that unless they permit it they will not get "star quality" directors/managers. It is about time that institutional and large private shareholders called the bluff of this gang of overpaid thieves. If THAT became the common attitude amongs shareholders, where would these "stars" get employed? They would still be *very* well paid in comparison to ordinary mortals, their days however of downright robbing the industry/company they are employed in would be numbered.

[Anonymous Coward]

Damn skippy!

In fact, I think the entire board of HP should resign because I'm sure a bunch of beancounters at a retirement fund could run the company loads better!

[Trevor_Pott]

@Anonymous Coward

Or better yet...

How about a beancounter as CFO, with Engineers in charge of the technical divisions. Get an experienced salesman in charge of the sales divisions and someone with decades of marketing experience in charge of marketing.

Make the CEO someone with a diverse background: management is certainly required, as is some experience with big-ticket sales but also a technical background is important as they will be overseeing a hugely technical company.

Get a chairman who has stock market experience and can serve as the interface between the shareholders and the board of directors. Suddenly you have people qualified for their positions with actual relevant experience to the areas they are overseeing. Get them in a room and have them do things like debate, argue, innovate and drive a corporate vision.

Apparently in tech companies however, that sort of talk is just crazy…

[Jim Morrow]

i don't get it

can somebody explain how this works? some of hp's shareholders are suing the company they own. so if they win, it'll be their own money that's used to pay damages. if they lose, they'll be out of pocket for hp's legal costs.

[Anonymous Coward]

Here's how it goes.....

...sue, win, then sell shares before collaspe. Profit

...sue, lose, market breathes sigh of relief and prices go up. Profit.

[Anders Halling]

Nooooo

It's sue, buy more stocks at the stupidly low price, and then profit..

9 billion $ gone because of a 100k $ expenses fraud?

Yeah, that stock price will _never_ pick up again....

[JaitcH]

Messrs. Hewlett and Packard must be ...

spinning in their graves. They were beacons of American industry and were honourable in their business dealings.

The trash management that has assumed the mantle has done little except besmirch their founders names. It is shameful.

In an earlier career I bought HP test products knowing they were high quality and that they would stand behind them in case of failure.

I wouldn't even by an ink refill from them now.

[Trevor_Pott]

@JaitcH

So...who do you buy from?

[Well out of it!]

Buying HP products? NO WAY!!!

On the basis of why would I want to provide succour and profits to a company that has f*ck*d its employees big time in the last few years, I and the vast majority of former HP employees I know will not buy HP products ever again. And, of course, neither will our family members and many of our friends . . . .

Futile protest? I don't think so, not when former employees number in their many tens of thousands!!!

[Anonymous Coward]

hmmm

Interesting how wealthy shareholders are quick to say "that's the way capitalism works" when shafting the rest of us, but the thought doesn't cross their mind when it might cost them something.

[Anonymous Coward]

Sex?

Sloppy sensationalist headline.... there was no sex, no affair, just a ethics witch hunt in HP and expenses mishandling.....

[Tony S]

Hocus Pocus

I must admit that I hadn't heard too much about this story. However, a couple of days ago, I was asked to take part in a survey that had the topic of CEO behaviour and it was about HP and what I thought of the incident, the reaction and how the company handled it. I note that they very carefully didn't mention how much money he walked away with as that might have affected the answers I gave - but possibly not.

Do I care if he was engaged in a bit of nooky? No

Do I mind that he fiddled his expenses? Not really

Am I cancerned that he sexually harassed staff? A little - but money and power are heady aphrodesiacs, and sometimes women are happy to play along despite their protests.

Does it bother me that he got a massive payout for being fired - sorry, asked to take an "extended vacation"? Damn straight - it's an obscene amount for someone to get because they fouled up, particularly when others lower down the food chain get sod all. But it is in line with a lot of other fairly ridiculous payouts we have seen.

I'm not sure quite why it affected the HP stock price so badly - but then Wall Street does tend to act rather robustly over scandals. Maybe we need a few more of the larger investor groups to start suing the companies and senior managers to stop some this outrageoous behaviour.

[Wize]

Wait a minute...

He was accused of sexual harassment. He was found to have fiddled his expenses.

They gave him a large wad of cash and increased his stock options?

I must be doing things the wrong.

[Vladimir Plouzhnikov]

You should remember

That it's not the shareholders who are suing HP. It's a bunch of lawyers taking a punt using a few of the most stupid and gullible shareholders as a tool and a cash cow.

No matter if the case is won or lost, the lawyers will win and the stupid shareholders who let them use their names will lose.

And to claim the money back the judge will have to find Hurd in a material breach of contract, which sloppy expenses paperwork just falls way short of...

[Anonymous Coward]

Excellent

Maybe, while the upper management is in disarray and panic, they'll stop sacking us by the thousand for no reason other than to satisfy some top-level twonks spreadsheet target.

[Howard Hanek]

Inevitable

I have a theory that these events are part of a vast conspiracy to create new scripts for daytime soap operas. I'm reluctant to publish my book in fear of the inevitable lawsuits that will follow.....

[Someone Else]

So what?

"[...] and the market punished HP (and its shareholders) upon the 8/6/10 revelation of Hurd's termination - slashing its stock rating and erasing over $9 billion in market capitalization when the company's stock resumed trading on 8/9/10".

So fucking what?

Guess what? The stock market does not guarantee returns. Stocks go up..AND DOWN...in price. You fucktard Wall street coke-snorting yuppie never-did-a-day-of-real-work-in-your-lazy-assed-lives crybabies want a guaranteed rate of return? Go buy a CD (Certificate of Deposit, not the shiny silvery thingie), then get yourself a nice warm bowl of STFU.

(But how do you REALLY feel about them?)

[Tom 13]

Meaning no disrespect to Misters Hewlett and Packard

I'm not sure even they would be able to turn the company around in the current environment. Laws were a bit more rationale when they started the company.

It's not just lawyers, it's lawyers for a retirement trust fund, most likely a union retirement trust fund. They understand nothing of economics let alone business. But hey, if you bet $100,000K on black, you've got a slightly less than 50/50 chance at walking away with double that.

[Eduard Coli]

But if Carly could why can't I?

Stuff like this just shows how badly the antagonistic relationship between company executives and the board needs to be restored. While they are at it they also need to restore conflict of interests rules to restrict board sharing so when one of these thieves is done scamming stockholders of one company they can not go on to scam another by using their hooks.

[kain preacher]

Hmm has any one ?

Checked to see if Hurd has moral turpitude clause?? If he has a moral turpitude clause then there is no way he should got what he did .

Moral turpitude is a legal concept in the United States that refers to "conduct that is considered contrary to community standards of justice, honesty or good morals."

[Big-G]

Applaud, or not

On the one hand, I feel like applauding the decision to go to litigation, but on the other, I sense a revenue opportunity for the lawyers. Yet another drain on the heard earned pensions of us mere mortals, damned if we do and damned if we dont.

[Raving]

Chinese Proverb

The sheep that are once fleeced return to be fleeced again.

[uninventiveheart]

Lucky that they're the top for now...

The only 'inspired' part of their lineup right now is Beats Audio. Have they learned nothing from Creative labs? (You can make it a feature of the computer, but it can't be the main attraction.)

Yeah, bad year to be Hewlett-Packard.

[Anonymous Coward]

Off with their heads

This has nothing o do with the law. This is a system of corrupted aristocracy identical to France before the revolution

[Grumpy Fellow]

Would this work?

I wonder if the shareholders could be counter-sued for funding the CEO's alleged escapades!

p.s. Do you suppose we could have a Barrister icon (with international "not" slash) for these "I am not a lawyer, but..." topics?

[disgruntled yank]

NY Times

Saturday's NY Times has an excellent article on this whole matter by Joe Nocera. You could look it up.

[Anonymous Coward]

False expenses = FRAUD

So why isn't the cunning stunter in GAOL?

Yet he walks off with fscking bonuses.

Cut the bastards balls off. That is all.

[Anonymous Coward]

Rotten to the core...

...the HP Board and senior management, that is.

The alarming thing is that the Board do not think they done anything wrong. They are just like most UK members of parliament - they do not see what is wrong in fiddling their expenses, some cannot see it is wrong when they get caught. The HP Board and HP upper management live in their own world, the HP-bubble, where moral values only exist for other people and any actions they take are justifiable.

Anonymous for the most obvious reason.

[James Fox]

@kain preacher

Thanks for clearing that one up.

I've always wondered what moral turpitude was, especially since US immigration puts it up there with genocide.

Thought occurs: If MH was found in breach of a moral turpitude clause, would he ever be able to leave the US for fear of not being allowed back in?

[Anonymous Coward]

Company of lies

What an absolute f&cking disgrace. $40M to a man who has lied about his expenses and committed fraud.

The same company refuses to promote me to the correct pay-grade for the job I perform.

What an absolute f&cking disgrace.

[Anonymous Coward]

Promotion will do you no good at HP

I speak from personal experience. They put me on my correct job code, but this has made f%^k all differnce to my pay - it just stayed the same. I am now postioned in the bottom 10% of my pay grade and earn less than some people two job grades below me. This is despite getting glowing FPR ratings for the past 10 years. BTW the lower 20% of any HP pay grade was (normally) reserved for non-performers (i.e. total wankers) or new-hires straight off the street with next to no experience and limited knowledge.