A couple of weeks ago I wrote about rewarding bad behavior as it related to BP’s departing CEO, Tony Hayward. Recently, HP announced CEO Mark Hurd was leaving with a $12.2 million severance payment and nearly 350,000 shares of stock worth about $16 million. His deadline to exercise options to buy up to 775,000 HP shares was also extended. All of this after a sexual harassment investigation led the HP Board to determine that, while he was not guilty of sexual harassment, he did violate HP’s standards of business conduct.
I could easily replace the “B” with an “H” and repost my thoughts; however, I’m approaching this post from a different angle. Yes, Mark got paid a lot to “resign” and I’m sure the thousands of employees who have lost their HP or EDS jobs over the last 24 months in an effort to control costs are none too pleased – BUT there’s another story here which is worthy of praise.
“HP would not reveal the amount of money improperly expensed by Hurd and the contractor but implied it wasn’t significant. ”Let’s be clear, the amount of expenses we’re talking about are not material to HP, ” Holston said. ”It wasn’t the dollar amount that drove the board decision. The fact that drove the decision for the company had to do with integrity, it had to do with credibility and it had to do with honesty,” said Mike Holston, HP General Counsel.
The saving grace of this event is how quickly the HP Board acted to make a difficult decision at a time the company was poised to make a run at IBM as a leading technology services company. This investigation started on June 29th – and by August 6th, news of Mark’s departure was hitting the press. There wasn’t much debate over the facts and how critical judgment, trust, and ethics are for a leader of one of the world’s largest companies.
I don’t know about you, but this gives me hope and actually solidifies my belief in HP as an admired organization. There was no hesitation – they did the RIGHT thing even though it may temporarily hurt their company. HP employees and shareholders should feel good about the Board’s conviction and swift action. This was not a case of values simply being a sign on the company’s wall; HP’s core values really do mean something.
Ironically, the standards of business conduct document starts with a message from Mark Hurd:
“Dear Hewlett-Packard colleagues:
We want to be a company known for its ethical leadership – a company where employees are proud to work, a company with which customers, business partners, and suppliers want to do business…
We know that actions speak louder than words. We must make decisions and behave in ways that we can be proud of, that reflect our commitment to doing the right thing. Every employee, along with our customers and partners, expects HP to stand for integrity in everything we do.”
While HP will have to replace Mark’s name, this introductory statement still rings true, and for that, they should be proud.
Now – we can still chat about slipping a morality and ethics clause in the new CEO’s contract that perhaps doesn’t allow for any payout should their SBC document be violated…just saying.