The Hurd LegacyBy Reuters | Print
Credited with turning around HP, the largest technology company by revenue, after the controversial leadership of his predecessor Carly Fiorina, HP's Mark Hurd unexpectedly announced his resignation as CEO. Hurd is leaving after a sexual harassment investigation by HP's board. CFO Cathie Lesjak will serve as acting CEO until a replacement is found.
The buttoned-down Hurd brought stability to HP after Fiorina resigned in February 2005 in the wake of a controversial deal to acquire PC maker Compaq.
"Mark Hurd was extremely instrumental in turning this company around," said Susquehanna Financial Group analyst Jeffrey Fidacaro. "There's going to be a serious gap in leadership at the top of this company."
HP, a Silicon Valley icon that was founded in a Palo Alto garage in 1939, has experienced a fair amount of turmoil in recent years. In 2006, former HP Chair Patricia Dunn resigned after reports surfaced that the company had hired private investigators to spy on board members and journalists to plug media leaks.A Successful Tenure
Hurd will be well compensated as he departs HP. According to a regulatory filing, he will receive a severance payment of $12.2 million.
Shares of HP have more than doubled since Hurd, the former CEO of NCR Corp, took the helm five years ago, cutting costs and expanding HP's footprint in the services market with acquisitions like the 2008 purchase of EDS Corp for $13.9 billion.
In a bid to reassure investors that its financials are healthy despite the departure of Hurd, HP raised its outlook for the full year, saying it now expects profit, excluding items, of $4.49 to $4.51 per share, compared with a previous outlook of $4.45 to $4.50.
HP said its board of directors has formed a search committee to find a new chief executive and board chair.
"It's a negative because the positive leadership that HP has had under Hurd is identified with his name," said Nehal Chokshi, an analyst with Technology Insights Research-Southridge Research Group.
HP, which was scheduled to report quarterly earnings later this month, also pre-reported its results.
Shares of Palo Alto, California-based HP closed at $46.30 on the New York Stock Exchange and fell to $41.50 in extended trading. (Reporting by Alexei Oreskovic; Additional reporting by Sinead Carew, Alex Dobuzinskis, Jim Christie, and Ritsuko Ando; Editing by Gary Hill, Tiffany Wu and Richard Chang)