Tornado Alley (PROG)

[tinner]

Only in America can you totally screw up and have your idiot friends pay you off!

Wait A Minute -- Why Does Mark Hurd Get $50 Million Severance When He Lied In His Expense Reports?*
Henry Blodget | Aug. 6, 2010, 7:38 PM | 9,018 | 73


Yes, I lied, but it will still cost you $50 millionSee Also:

HP CEO Mark Hurd Gets $50 Million Severance For Sex Scandal That Costs HP Shareholders $10 BillionHP CEO Mark Hurd Resigns After Sexual Harassment AccusationsHP's Stock Crashes 10%

In the conference call following the shocking ousting of HP CEO Mark Hurd, it was revealed that the real reason he was forced out (can we just say "fired," please?) was because he filed false expense reports to hide the affair he was having.

Here's the description in the NYT:

Michael Holston, executive vice president and general counsel, said during a conference call that the violation [that Hurd was fired for] involved expense reports, though he would not discuss the amount of money involved. Mr. Holston described Mr. Hurd’s relationship with the contractor as “close” and “personal.” The woman, he said, had been hired by the office of the chief executive. He also said the inaccurate expense reports were intended to conceal the personal relationship, adding that it showed “a profound lack of judgment.”

We have also, of course, learned that Mark Hurd will be getting a $50 million severance payout ($12 million in cash, plus stock). This is on top of the $10 billion of market value that HP shareholders have lost so far as a result of his sudden departure.

Now, last time we checked, filing false expense reports was a form of fraud (and also usually a form of embezzlement, although we don't have enough details to know if that was the case here). According to HP's general counsel, Hurd filed the fake reports to deceive the company. Even if he didn't steal any money, therefore, he certainly committed the act of dishonesty that almost every employment contract contains as a condition on which an executive may be fired "for cause."

Generally, things like golden parachutes are dependent on executives not being dismissed for cause, and defrauding your company is certainly "cause."

So, on behalf of HP shareholders, we have a question for HP: Why is Mark Hurd getting a $50 million severance payout if he filed bogus expense reports? And why was he allowed to "resign." Why wasn't he fired for cause?