Mark V. Hurd, chief executive of Hewlett-Packard resigned suddenly on Friday after accusations of sexual harassment led to the disclosure of what HP said were falsified expense claims.
Hurd, in a statement confessed: "I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career.”
An internal company investigation found "numerous instances" of inaccurate expense claims submitted by Hurd. The expense claims were manipulated to hide a "close, personal relationship" Hurd apparently enjoyed with an independent contractor. The contractor may not have enjoyed the relationship quite as much as Hurd. She filed a complaint of sexual harassment against the CEO, prompting the investigation.
Hurd has since reached a legal settlement with the woman who accused him of sexual harassment, according to sources who spoke to Reuters.The unnamed woman did not have sexual relations with Hurd, according to her lawyer Gloria Allred.
But according to Reuters' sources, some irregularities in Hurd's expense claims were discovered after the woman made the sexual harassment charges on June 2.
The murky details are in dispute, but Hurd seems to have submitted expense claims in which the woman's presence at a dinner or some other event were left off the record. In other instances the contractor received compensation for no legitimate business purpose, HP said.
Hurd is married with two children.
One of Reuters' nameless sources said that on "a couple" of occasions, the contractor was paid expenses to attend an event where there was none, but where Hurd happened to be staying.
The questionable claims amount to around $20,000 over a two-year period, Reuters' source said. Hurd apparently offered to pay back the expenses. He should be able to afford it - he received nearly $100 million in compensation over his three year tenure as CEO and will get a severance payment of $12.2 million according to U.S. Securities and Exchange Commission filings.
HP shares lost 10 per cent of their value as news of the scandal broke. HP said current Chief Financial Officer Cathie Lesjak will take over as CEO while a replacement for Hurd is sought.
Hurd become chief executive in 2005, after previous incumbent and now Senator wannabe Carly Fiorina was unceremoniously axed by the board.
Hurd was quickly embroiled in scandal after HP arranged surveillance of tech journalists and its own board members as it tried to clamp down on leaks.