The shocking announcement from the world's top personal computer maker sent its shares plunging 10%, as CEO Mark Hurd is one of the most admired executives in Silicon Valley.
Hewlett-Packard Co CEO Mark Hurd resigned on Friday after an investigation found that he had falsified expense reports to conceal a "close personal relationship" with a female contractor.
The shocking announcement from the world's top personal computer maker sent its shares plunging 10%, as Hurd is one of the most admired executives in Silicon Valley, credited with reviving HP after the tumultuous reign of Carly Fiorina.
The unnamed contractor, who did marketing for HP from late 2007 to fall 2009, contacted the firm's board in June this year and alleged that Hurd had sexually harassed her, HP said.
The board ordered an investigation and found that the married 53-year-old Hurd did not violate HP's sexual harassment policy. But he had a "close personal relationship" with the woman that was never disclosed to the board, HP said.
"The board investigation found that Mark demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP and Mark agreed," HP general counsel Mike Holston said, adding that the board's decision to replace Hurd was unanimous.
Gloria Allred, a Los Angeles-based attorney who has represented numerous high-profile clients including Tiger Woods' alleged mistresses, said late Friday she is representing the woman who made the sexual harassment claim.
She said her client did not have sex with Hurd, but declined to identify the woman or comment further.
According to HP, Hurd filed "numerous inaccurate expense reports" that concealed his relationship with the contractor, who also received compensation and expense reimbursements without legitimate business reasons.
Hurd, who was also chairman of HP and had a reputation for rigid cost discipline, said the decision to step aside was a "painful" one.
"I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP," Hurd said in a statement.
A source familiar with Hurd's account of the situation described his relationship with the contractor as "business acquaintances" who had dined together about a dozen times. The source said the expense issues stretched over two years, were related to travel, meals and lodging, and totaled up to $20,000.
Another source familiar with the situation described the woman as a "low-level contractor" who would assist at marketing events. This person said Hurd submitted falsified expense reports that said he dined alone or with a bodyguard when he had dined with her.