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HARVARD BUSINESS I

SCHOOL

941-O6

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JAY W. LORSCH KRISHNA PALEPU MELISSA BARTON

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Hewlett-Packard Company: CE Succession in 2010
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On August 6, 2010, Mark Hurd resigned as CEO of Hewlett Packard after an H.P. contractor accused him of sexually harassing her while she worke44 r the company. The H.P. board conducted an investigation to determine the merit of the allegation. They found no evidence of sexual harassment, but discovered that Hurd had failed to live up to the H.P. Standards of Business Conduct.1 Therefore, the board asked Hurd to step down. He exited with a severance package worth approximately $35 million.2

Hewlett-Packard Enters the 2 t Century
Fiorina's Legacy
Carly Fiorina became HJ CEO id-4 999. She presided over the highly contested acquisition of , Compaq in 2002, believing tic the jothing of the two companies would make H.P. more competitive with Dell, IBM, and Sun Microsystems in computer offerings, as well as provide substantial costsavings.3 The acquisition was approved by a shareholder vote of 51% to 49%, which left many people dissatisfied, including H.P. director, Walter Hewlett, who had initiated the proxy fight opposing the merger and who hit' lrpsiPbd in 2003. After the a cquisitio, Fiorina cut approximately 15,000 jobs; meanwhile, she failed to produce the n promised results. One year after the acquisition, H.P.'s share price had lost approximately 2 percent of its value, while IBM and Dell had seen increases in their share prices. H.P.'s revenues also declined more than Fiorina had originally predicted. She was unable to develop and execute a strategy that the board believed would generate a recovery for H.P. (For more details: Krishna G. Palepu, Jay W.

HP Chief Hurd quits after sexual harassment claim CNN Money August 6 2010

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View: At H.P., Governance Trumps Gossip," The New York

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