Mark Hurd is walking away with a $12.2 million check, plus a boatload of stock.
The deposed Hewlett-Packard CEO will have the right to exercise millions of dollars worth of stock options in the next month, and to sell the shares of some performance units and restricted shares he has received over five years.
The terms of his separation are outlined in a filing the company made Friday afternoon.
The company’s proxy filing made earlier this year says Hurd (right) is eligible to receive as much as $53 million in pay and perks upon his separation from the company, all told, depending on the circumstances.
The separation agreement appears to leave the terms of that best-case scenario largely intact.
That ranks right up there with the best of them. Ken Lewis, who left Bank of America last fall after a near shareholder revolt, walked off with $53 million himself, though it must be noted that his offense was just running the company into the ground – not running around with consultants or falsifying expense accounts.
Other disgraced CEOs have walked off with less. Most recently, former BP chief Tony Hayward left with a pension plan valued at $17 million or so. Harry Stonecipher, who was forced out as chief of Boeing after an affair with an employee came to light, lost $38 million in stock following his 2005 departure.
None of these guys has been living paycheck to paycheck, obviously, but even in this crowd Hurd’s pay stands out. He has taken home $142 million in pay, perks and stock since his 2005 hiring, according to SEC filings.
That’s not all. Hurd’s arrangement with HP holds that he is eligible to get his full retirement nut if the company is sold, which obviously it hasn’t been, or if his employment is terminated “without cause.” He can collect lesser sums in other circumstances, such as disability or death, and would get nothing if he leaves of his own will or is fired for cause.
HP executives made clear in Friday’s press release and on conference calls after the market closed that they disapproved of Hurd’s behavior. His office hired a woman he had a “personal relationship” with to do marketing work. He then faked his expense accounts to keep the relationship, which he hadn’t disclosed to the board, secret.
��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 said.
But HP also said on a conference call after the bombshell announcement that it had reached a legal agreement with Hurd Friday.
That could mean practically anything, but it is certainly plausible that the agreement precludes the sides from suing each other or saying much more about the whole mess.
It also probably means Hurd gets to walk away with a big check. How big isn’t clear, but CNBC reported he would get between $40 million and $50 million – suggesting he’ll get most of the money he would get in a without-cause termination, discounted a bit for saving the company the trouble and embarrassment of legal action.
When Hurd was hired five years ago, HP said it was “impressed by his emphasis on developing internal talent while reaching outside for new skills, his understanding of the role of culture in a company’s success and his personal integrity.”
Things didn’t exactly work out that way on that last count — but you might not be able to tell from a look at Hurd’s bank account.