August 10, 2010
Friday’s sudden resignation of Hewlett-Packard Chief Executive Mark Hurd reopens old questions about H-P’s strategy and succession, The Wall Street Journal reports. Despite assurances from H-P executives that the Palo Alto, Calif.-based technology company would continue business as usual, its sudden CEO vacancy has rattled Wall Street and others. Hurd’s resignation reportedly resulted from his misuse of corporate expense accounts, uncovered during an investigation of sexual-harassment allegations against him by an actress that H-P had hired as an event-planning contractor.
Hurd, who brought consistency and performance that H-P lacked under his predecessor Carly Fiorina, has no clear successor. But an H-P director said the board would look at both internal and external CEO candidates, the Journal reports. Since joining H-P as CEO in early 2005, Hurd’s strategy was to cut costs and make H-P a one-stop tech shop by acquiring companies that provide software, smartphones and networking equipment, augmenting H-P’s already vast portfolio of personal computers and printers. Under Hurd, the company’s stock price more than doubled, but the news of his sudden departure caused H-P shares to plunge 8.3 percent in after-hours trading on Friday, to $42.48.
Toni Sacconaghi, an analyst at Sanford Bernstein & Co. quoted by the Journal, seemed sanguine about H-P’s future, saying the company still has one of the strongest tech brand names and a robust product portfolio across multiple geographies. — Greg Beaubien